Validating its increasing focus on wireless operations, Alltel Corp. posted robust fourth-quarter and full-year results for 2004, including higher-than-expected customer growth, average revenue per user and lower churn.
Alltel, which recently announced plans to acquire rural wireless provider Western Wireless Corp., posted 139,000 internal net customer additions during the fourth quarter compared with 95,374 net additions during the fourth quarter of 2003 and analysts estimates of around 100,000 net additions. Alltel also reported 92,345 net customer additions during the fourth quarter of 2004 through acquisitions.
For the year, Alltel reported 510,717 internal net customer additions, which was an 86-percent increase compared with the 274,365 subscribers the carrier added in 2003. Including customers added through acquisitions, Alltel posted 603,062 total subscriber additions last year-ending the year with nearly 8.3 million subscribers-compared with 421,827 total customer additions for 2003.
Alltel said it will gain an additional 1.4 million domestic and 1.6 million international subscribers following its pending acquisition of Western Wireless, which is expected to close later this year.
Bolstering Alltel’s strong customer growth during the fourth quarter was a modest 12-percent increase in gross subscriber additions and a more significant drop in customer churn from 2.53 percent during the fourth quarter of 2003 to 2.17 percent last year. A 2-percent drop in full-year gross subscriber additions was offset by a drop in customer churn from 2.59 percent in 2003 to 2.23 percent last year.
Average revenue per user also improved from $47.26 during the fourth quarter of 2003 to $49.24 last year, while full-year ARPU increased from $47.51 in 2003 to $48.13 last year.
Financially, Alltel reported an 11-percent increase in wireless revenues from $1.19 billion during the fourth quarter of 2003 to $1.33 billion last year. The wireless revenue increase helped offset a 1-percent drop in wireline revenues as Alltel posted a 6-percent year-over-year increase in total revenues during the fourth quarter from $2 billion in 2003 to $2.1 billion last year.
Full-year wireless revenues increased 7 percent from $4.7 billion during the fourth quarter of 2003 to $5.1 billion last year, again offsetting a 1-percent drop in wireline revenues.
Fourth-quarter net income jumped 13 percent from $240 million in 2003, or 77 cents per share, to $270.1 million last year, or 89 cents per share. Full-year net income increased 9 percent from $954.4 million in 2003, or $3.05 per share, to $1 billion last year, or $3.37 per share.
