Mobile Earnings Galore
By Carlo Longino, Thu Oct 21 22:15:00 GMT 2004

Several mobile-industry companies have delivered a mixed bag of quarterly earnings reports this week.

Cingular, which will become the biggest carrier in the US after it completes its buyout of AT&T Wireless, said its third-quarter sales rose about 5% on the addition of 657,000 subscribers in the quarter, but profit fell 18% from last year's levels as ARPU slipped 5% to $49.78. Cingular's net adds blew away AT&T's numbers, and the two both showed ARPU declines. Churn held steady at 2.8% for Cingular, but a major challenge for the operator as it integrates AT&T will be to hang on to the users flocking away from that carrier.

The world's biggest carrier by subscribers, China Mobile, saw its third-quarter profits rise 16 percent over last year, offsetting declining ARPU with marketing programs encouraging users to make more voice calls and send more text messages. Average revenue per user fell just 1 yuan to 92 yuan ($11.10) for the first nine months of the year, while users talked 4 minutes more each month, raising average use to 291 minutes a month. China Mobile now has 194.4 million users, adding 9 million during the quarter. The operator has grown by more than 28 million users this year, with all but 1.3 million of those prepaid customers.

Network equipment vendor Lucent saw its fourth-quarter profit rise, topping its first full year of profits since 2000. Sales were up 19 percent over last year to $2.4 billion, and earned $348 million, compared to $99 million a year ago. Sales of its wireless equipment leapt up by 75% to $1.1 billion, and now represents almost half the company's total revenue, whereas it was less than a fifth of the total four years ago. The company looks to have finally left its woes behind it, growing sales in key areas like wireless, expanding outside the United States, and improving margins by more than 10 percentage points over last year.

Microsoft said its revenues for the fiscal first quarter grew 12% to $9.19 billion, with net income up more than 10% to $2.9 billion. The company's mobile and embedded devices unit, responsible for Pocket PC PDAs and the Windows Mobile operating system among others, narrowed its loss to $20 million dollars from $34 million last year, on revenues that increased to $69 million from $53 million a year ago. In the previous quarter, the unit lost $42 million on sales of $70 million.

Leading chipmaker Texas Instruments said that record demand boosted its quarterly earnings by 26%, but excess inventory would weigh on its fourth quarter results. TI, which supplies the chips for more than half of all mobile phones, said that revenues from its wireless products was up 40%, and helped offset weakness in its semiconductor business. Demand remains strong, however, as rival Qualcomm said it still can't keep up with orders, and the situation might last into next year.