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Maven: One Question Matters for AT&T

Unfortunately, the business media didn't answer it in their uneven coverage of the telco's earnings.
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It warms the depths of The Business Press Maven's cold heart to see two sets of headlines making diametrically opposed points on one prominent company's earnings. Holy mutual exclusion, Batman! Robin, what better way to illustrate the notion that underlies all my work: No matter what the wise investor is reading, he must think for himself.

Or just lie back and let The Business Press Maven do the thinking for him, an acceptable alternative indeed.

Look at what

The Wall Street Journal

said about


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Tuesday earnings report:

Wireless Growth, Mergers Fuel AT&T Net

. Got that? Wireless growth helped lead to an almost doubling of first-quarter revenue and net profit.

Now check out

The New York Times'

headline on the same first-quarter earnings:

AT&T Earnings Beat Forecasts Despite Slow Market for Mobile Phones

. Slow market for mobile? Uh,

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The Wall Street Journal

told me that mobile's growth


that good net.

The Wall Street Journal


The New York Times

weren't the only awkward pairing.

Dow Jones'



said, "

AT&T profit doubles on merger, mobile

." Countered


: "

AT&T profit doubles, but wireless lags


Strength, weakness. I guess one man's double is another's lag. Jokes aside, words should not be such an imprecise measurement of financial fact.

Which side is right? One has to be, right? Though it would seem impossible, both sides actually include mistaken half-assumptions and miss the key point. They (OK, I) don't call the business media the lowest form of thinkers for nothing. Let us delve.

In the fourth paragraph of its article,

The Wall Street Journal

makes an important point, that wireless-data revenue was mighty. In other words, customers are doing more on their cell phones. And as they turn their cell phones into mini-computers, they pay more. And AT&T makes more, dialing "M" for money.

It's a good point, an essential point. But unfortunately, only


essential point.

Two paragraphs later, the


tells us that the company's wireless unit added 1.2 million subscribers in the first quarter, half the fourth-quarter increase. The


then quotes the CFO -- without disputing it -- as saying that the decline was seasonal. Well, sure. They weren't expected to do as well as in the fourth quarter, when the wireless industry is kicking.



dudes, expectations were for around 1.5 million new customers. So, seasons aside, AT&T underperformed.


mentions this pretty prominently but then buries, toward the bottom of the piece, the increased take per customer and a good hint from the CFO that this number might very well be rising.

The real point is the puzzle. This is neither a good nor bad situation, which means it is not made for business journalists and certainly does not lend itself to headlines.

But the final and only essential question is, can increased revenue per customer make up for a possibly saturating market? The answer is yes.

Ever notice how each time a Windows operating system is unveiled, the story line is that the new system is no good, full of bugs and won't sell up to expectations, let alone surpass them? I read these articles this time on Vista, last time on XP, the time before that on -- well, you get the point. Anyhow,


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beat expectations, rendering yet another round of articles moot.

And in conclusion, I just want to point out that The Business Press Maven is normally kind and merciful. True, I spit all sorts of bile about the thematic mistakes made by the business media, the inconsistencies, the inaccuracies, the assaults on common sense.

But tune in this weekend as I turn from kind and merciful to vengeful and wrathful. The issue will be Friday's report of GDP growth. Whoops, that's Friday's


report. As you know, the Commerce Department revises the numbers more than the average author does a novel. But that doesn't stop the business media from reporting each number without mentioning the chance of revision or the pattern of past revisions. Instead, they draw a myriad of conclusions about the number that time will probably prove false. Nothing, as The Business Press Maven

has said until steam has emerged from his ears, misleads investors more on the state of the economy.

That's why, though I normally don't mention business journalists by name -- how many of you are publicly flogged for your transgressions at work? -- I will continue my policy of writing mocking limericks featuring the names of journalists who mislead investors by reporting this essential figure disingenuously.

Thanks to me (hey, who else has been so vocal on this point?), the business media are truly starting to change the way they are reporting this figure. But too many are still caught in the hold of the way things have always been, and The Business Press Maven is going to extract you from there and put you in a limerick. I will make this world safe for investors yet.

At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.

A journalist with a background on Wall Street, Marek Fuchs has written the County Lines column for The New York Times for the past five years. He also contributes regular breaking news and feature stories to many of the paper's other sections, including Metro, National and Sports. Fuchs was the editor-in-chief of, a financial Web site twice named "Best of the Web" by Forbes Magazine. He was also a stockbroker with Shearson Lehman Brothers in Manhattan and a money manager. He is currently writing a chapter for a book coming out in early 2007 on a really embarrassing subject. He lives in a loud house with three children. Fuchs appreciates your feedback;

click here

to send him an email.