AT&T's Cingular Earnings Nearly Quadruple
Cingular Wireless, the nation's largest cell phone provider, said its fourth-quarter profit nearly quadrupled, boosted by customer growth during the winter holiday quarter.
Cingular, which is now fully-owned by AT&T, said it earned $782 million during the fourth quarter, compared with $204 million in the same quarter of 2005. The company reported revenue of $9.8 billion for the fourth quarter of 2006.
The company, which was rebranded under the AT&T name last week, was a joint venture of Atlanta-based BellSouth and AT&T before AT&T completed its $86 billion purchase of BellSouth last month. The wireless company will report earnings as part of the parent company in future quarters.
The wireless unit's growth in the fourth quarter was driven in part by a net increase of 2.4 million customers during the holiday quarter, typically the heaviest selling season for cell phones.
Company executives had previously said that Cingular's churn rate -- the percentage
of customers who switch to other carriers -- could increase from new lows. But in the fourth quarter, the churn rate was 1.5%, the same as in the third quarter and lower than the 1.9% it reported in the year-ago quarter.
"Our last quarter as a joint venture operating under the Cingular name was our best ever on a variety of fronts," said Stan Sigman, the company's president and CEO.
For the year, the company's net income was $2.5 billion, compared to $333 million in 2005.
AT&T is expected to post results on Jan. 25 at 8 am New York time, and will host a webcast at 10 am to discuss results.