March 11, 2015 / 1:06 AM / 3 years ago

AT&T to take $130 million charge related to voluntary retirement

An At&T logo is seen atop a store in Beverly Hills, California August 31, 2011. REUTERS/Danny Moloshok

(Reuters) - AT&T Inc (T.N) said it expected to take a charge of about $130 million in the current quarter, related to the voluntary retirement of nearly 3,000 employees by March 31.

The retirements were made under a special offer allowing for lump sum distributions and enhanced payments, the telecom company said in a filing on Tuesday.

In the first quarter ending March, the No. 2 U.S. wireless company said that the rate of customer defections, or churn, is expected to have been lower over the previous year and the previous quarter. Faced with intense competition and promotional activity in the fourth quarter, churn rose to 1.22 percent from a year earlier.

AT&T also said it expected costs related to the acquisition of Mexican wireless company Iusacell to hurt its earnings in the first quarter.

The U.S. company agreed in November to buy Iusacell, Mexico’s third-largest wireless operator, for $1.7 billion to grab a slice of a market with lower cellular penetration than the United States and faster potential growth.

AT&T also warned of pressure on its margins, saying it expected margins in both its wireless and wireline businesses to be lower.

The sale of Connecticut wireline properties, the exiting of some low-margin businesses and non-cash changes in benefit expenses are expected to hurt margins in the wireline business, AT&T said.

Margins in the wireless business are expected to come under pressure partly due to the adoption of the Mobile Share Value plans, it said.

AT&T forecast net addition of about 400,000 postpaid customers in the current quarter. The company had net added 625,000 postpaid subscribers in the year-earlier quarter, marking its strongest postpaid growth in the first quarter in five years.

AT&T continues to expect its acquisition of satellite TV company DirecTV DTV.O to close in the first half of 2015. The deal, valued at $48.5 million, is awaiting regulatory approval.

In a separate filing on Tuesday, the company said total compensation for Chief Executive Randall Stephenson was $24 million last year, up from $23.2 million in 2013. Total compensation for Chief Financial Officer John Stephens was $10.7 million in 2014 versus $7.9 million in 2013.

AT&T’s shares closed at $32.78 on the New York Stock Exchange on Tuesday.

Reporting by Lehar Maan in Bengaluru and Malathi Nayak in New York; Editing by Kirti Pandey and Ken Wills

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below