AT&T beats Q4 targets, betting big on business customer base in 2015
Following multi-billion dollar acquisitions to expand coverage into Mexico, AT&T published fourth quarter earnings after the bell on Tuesday.
The nation's second largest mobile provider reported a net loss of $4 billion, or 77 cents per share (statement).
Non-GAAP earnings were 55 cents per share on a revenue of $34.44 billion.
Wall Street was looking for earnings of 54 cents per share with $34.26 billion in revenue.
For the full year, AT&T posted $132.4 billion in revenue with $2.51 in earnings per share.
Looking forward, AT&T chairman and CEO Randall Stephenson predicted in the report that the company's "largest revenue stream will come from business-related accounts, followed by U.S. TV and broadband, U.S. consumer mobility and then international mobility and TV" after closing the DirecTV deal.
AT&T announced its intended $48.5 billion purchase of DirecTV last May with the intentions of strengthening its mobile broadband connectivity. Such a deal would also give AT&T leverage to negotiate better content costs and add customers.
"Our transactions with DIRECTV and Mexican wireless companies Iusacell and Nextel Mexico will make us a very different company," Stephenson explained. "We'll be unique in the industry because we'll be able to offer integrated capabilities across a diversified base of services, customers, geographies and technology platforms."
The U.S. Federal Communications Commission has yet to approve the merger.
The U-verse strategic business customer unit grew its revenue by 14.3 percent year-over-year to $2.6 billion for the holiday quarter.
Total U-verse revenue rang up to $3.9 billion in Q4, producing more than $15 billion over the year. Those results were fueled by 405,000 new U-verse high speed Internet subscribers along with 73,000 U-verse TV subscribers.
On the mobile side, AT&T posted more than one million new postpaid smartphones added in the fourth quarter and nearly five million in 2014.
Earlier this month at the 2015 Consumer Electronics Show in Las Vegas, AT&T's mobile and business unit CEO Ralph de la Vega unveiled a number of strategies aimed to tackle the Internet-of-Things wave.
Among them were the expansion of AT&T's VPN cloud link service Netbond and the AT&T Work Platform, a method for separating billing for employee and company use on employee-owned devices.
AT&T's most recent IoT forecast calls expects the connected device base to grow from 4.9 billion in 2015 to more than 25 billion by 2020.
In the Q4 earnings report, AT&T boasted it is "leading" the Internet of Things wave with 19.8 million connected devices on its network thus far.
On Monday, AT&T announced it plans to acquire Nextel Mexico -- the fifth largest network in Mexico -- for nearly $1.88 billion.
That follows up the $2.5 billion purchase of Iusacell, touted to cover 70 percent of Mexico's population.
At the time, AT&T outlined ambitions of establishing "the first-ever North American Mobile Service area" for U.S. customers calling or visiting Mexico, and Mexican customers calling or visiting the United States.
The cross-border network aims to eventually serve 400 million consumers and businesses across the United States and Mexico.