Revenue increased 4.4% to $3.904B in 4Q03, for a net loss of $84M or $0.03 per share; full-year revenue was $15.659B, net income was $442M

January 22, 2004

4 Min Read

REDMOND, Wash. -- AT&T Wireless (NYSE:AWE) said today its fourth quarter 2003 services revenue grew 4.4 percent from the year-ago quarter to $3.904 billion. Full-year services revenue of $15.659 billion increased 8.1 percent over 2002, meeting the company's guidance for the year.

For the fourth quarter, net loss per share (EPS), was ($0.03) per share compared with ($0.05) per share in the year ago quarter. Earnings per share for the year was $0.16, compared with a 2002 fiscal year net loss per share of ($0.87).

Fourth quarter OIBDA (defined as operating income before depreciation and amortization) was $890 million, a decrease of 2.6 percent over the same period last year. The quarter-over-quarter decline in OIBDA was driven by both planned events, including a new brand advertising campaign, support of local number portability (LNP) and additional restructuring charges; and unplanned events, such as higher than expected costs tied to both LNP and a newly installed customer relationship management software platform. These factors also contributed to a 160 basis point quarter-over-quarter decline in OIBDA margin, from 24.4 percent last year to 22.8 percent in this fourth quarter.

Consistent with the company's previous guidance for growth in the mid- to high teens, full-year OIBDA, excluding licensing costs impairments, climbed 17.1 percent to $4.477 billion, from $3.822 billion in 2002. 2003 OIBDA margin, excluding licensing costs impairments, was 28.6 percent, a 220 basis-point increase from 2002's OIBDA margin, excluding licensing costs impairments, of 26.4 percent. Full year OIBDA for 2003 was $4.394 billion, up 76.2 percent from 2002 full year OIBDA of $2.493 billion. Operating free cash flow for the year was $1.03 billion.

"We had a good year, meeting our annual guidance, growing the business, and positioning AT&T Wireless well for future growth," said John D. Zeglis, AT&T Wireless Chairman and CEO. "In 2003, we delivered more than $1 billion in operating free cash flow; grew services revenue by more than 8 percent; and increased our margin to more than 28 percent."

"We did hit some operational rough spots in the fourth quarter, but the good news is that those issues are largely behind us. And we understand the challenges, such as churn, that we must continue to focus on this year," said Zeglis.

"Like any company in transition, we've had our ups and downs," Zeglis explained.

"But these have never interrupted our consistent growth on all the metrics that count in our industry. We see a bright future and believe 2004 to be no exception to our trajectory of growth and profitability."

ARPU was $58.70 for the fourth quarter, down 2.2 percent from the same period last year. Steady ARPU was supported by data revenues, international toll, and higher regulatory fees, while offset by continued pricing pressure and less breakage from wireless minute buckets.

Churn for the year was 2.6 percent, matching 2002's full year level and reflecting the company's long-term strategy of improving the profitability of the overall subscriber base. Fourth quarter churn was 3.3 percent, driven by a high number of contract expirations of the prior year's holiday contract signings, systems-related impacts on customer care, and LNP.

Total revenue (services revenue plus equipment revenue) for the fourth quarter was $4.215 billion, an increase of 4.1 percent over the fourth quarter of 2002.

Net subscriber additions were 128,000 for the fourth quarter and 1.060 million for the year, bringing the company's total consolidated customer base at the end of 2003 to 22.0 million, an increase of 5.4 percent over 2002.

Minutes of use per subscriber grew to 551 in the fourth quarter, an increase of 8.7 percent from the fourth quarter of 2002.

Capital expenditures, including internal use software, totaled $1.164 billion in the fourth quarter, a decrease of 45.8 percent from the year-ago quarter. AT&T Wireless said the majority of its capital for the quarter related to the GSM/GPRS network, along with non-network spending related to system upgrades and consolidation.

2004 Outlook

AT&T Wireless also provided financial guidance for 2004, saying it expects to grow services revenue at a mid-single digit percentage over 2003. OIBDA margin, excluding any impairments, measured as a percentage of services revenue, is expected to be in the low 30s, and capital expenditures are expected to remain around 20 percent of services revenue. The company also said it expects to increase positive operating free cash flow by around 20 percent over 2003.

AT&T Wireless Services Inc.

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like