AT&T Q4 profit down more than 23 percent

AT&T reported fourth-quarter earnings today, with revenue rising slightly, but profit falling more than 23 percent to about $2.4 billion. The company indicated it will cut capital spending this year by 10 to 15 percent, or by $2 billion to $3 billion from 2008 levels.

The telco giant, like former Bell company brother Verizon, saw wireless data, broadband Internet and TV as the main sources of strength during the fourth quarter, but those strengths were not enough to offset factors such as declining landline revenue, increasing costs from hurricane restoration and other issues, as well as iPhone subsidies.

Revenue for the quarter was about $31 billion, which was up about 2.4 percent year-over-year, but wireline revenue was again the source of weakness, down about 3.3 percent to $17.1 billion. Overall for 2008, revenue actually rose about 4.3 percent to $124 billion, which pushed profit up from $11.9 billion in 2007 to $12.9 billion for 2008. AT&T CFO Rick Linder said on the company's earnings call this morning that its outlook for 2009 is to increase revenue by a low single-digit percentage. But Linder and AT&T CEO Randall Stephenson said that though the company was proceeding with caution into 2009, it is well-positioned for ongoing growth. The earnings call was in progress as of this writing, and we'll post an update later with further information.

AT&T did post an impressive growth in broadband subscriber additions for the fourth quarter-about 357,000 users-though this figure also includes wireless broadband users. AT&T also added 264,000 U-verse TV customers, not as many as Verizon added during the quarter, but well above the 105,000 TV customers it added in the final quarter of 2007.

For more:
- The New York Times has this story

Related articles
AT&T announced last month that it would cut 12,000 jobs
UBS predicted late last year that AT&T would lead capex cutting
AT&T reported mostly good news in the third quarter of 2008

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