Alltel 4Q net earnings slip 12 percent

Alltel Corp. reported Tuesday that profits from its wireless business rose as it built sales and added customers in its fourth quarter, but overall earnings slid 12 percent, showing the effect of Alltel's spinoff of its traditional phone business.

Alltel reported a profit of $215.9 million, or 58 cents per share, compared to $255.1 million, 66 cents per share, in the year-ago quarter. Alltel had revenue for the quarter of $2.09 billion, compared to $1.84 billion a year before.

Analysts surveyed by Thomson Financial had projected a quarterly profit of 59 cents per share on revenue of $2.04 billion.

Alltel shares rose 2.5 percent, or $1.48 to $61.91 in early trading on the
New York Stock Exchange. Analysts on a conference call with Alltel executives praised the company for its strong performance.

Alltel has been active in acquiring other wireless carriers and has been the subject of talk that it could be a target for acquisition itself. Alltel President and Chief Executive Officer Scott Ford said the company would review "a broad spectrum of options," a process that's expected to take months.

Ford would not be more specific for the analysts on where the "strategic review" could lead.

For the fiscal year, Alltel's profit was $1.13 billion, $2.93 per share, compared to profits a year ago of $1.33 billion, $3.87 per share. Revenue for the year was $7.88 billion, up from $6.57 billion a year before.

In the third quarter, Alltel completed the spinoff of its traditional phone business, merging it with Valor Communications Group Inc. in a $4.9 billion deal that created a new Little Rock-based company, Windstream Corp.

Alltel's continuing wireless business had a quarterly profit of 63 cents per share, up from 40 cents per share a year ago. The segment had a profit of $234.95 million, compared to $155.08 million in the prior year.

During the fiscal year, Alltel repurchased 28.5 million shares, nearly 7.5 percent of total shares outstanding and filling more than half of a $3 billion repurchase authorization.

"Our company's growth in revenues and earnings, for both the fourth quarter and for the full year, was driven by record-level customer additions as Alltel became a wireless-only business," Alltel President and Chief Executive Officer Scott Ford said.

"In total, Alltel returned more than $6.7 billion in cash and Windstream stock to our shareholders. We ended the year with only $2.7 billion in outstanding debt and $1.8 billion in outstanding net debt, maintaining one of the strongest balance sheets in our industry. And, once completed, our share buyback will be one of the largest relative share repurchases over the past decade."

Alltel added 228,000 customers on a net basis for the quarter and average revenue per wireless customer was up 1 percent from a year ago at $55.84. For the year, Alltel added a net 640,000 customers.

Group president Kevin Beebe said the company expects to see increased growth in the new fiscal year from the sale of data services and that Alltel will make it easier for customers to use those services.