AT&T Wireless ( AWE) posted more disappointing numbers Friday. The struggling No. 3 U.S. wireless service provider posted a first-quarter loss and withdrew its 2004 financial guidance, saying it needs maximum flexibility to manage its business between now and the end of the year. The company's $41 billion acquisition at the hands of No. 2 player Cingular is due to close around year-end. For the quarter ended March 31, AT&T Wireless posted a loss of $58 million, or 2 cents a share. That reverses the year-ago profit of $135 million, or 5 cents a share. Service revenue was flat at $3.75 billion, and total revenue rose 3.2% to $4.08 billion. The news comes just days after the Redmond, Wash., company stunned Wall Street by admitting that it lost 367,000 customers in the first quarter. The subscriber loss was the company's first ever. On Friday, AT&T Wireless said its so-called churn rate, measuring the number of users who quit each month, soared to 3.7%. Average revenue per user, or ARPU, slid to $56.60 in the latest period from $58.70 in the year-ago quarter. The decline in ARPU was driven by higher promotional service credits and lower average monthly recurring charges, which resulted in lower average revenue per minute, the company said. On Friday, AT&T Wireless slipped 4 cents to $13.90.
Even though AT&T tried a last-minute bribe of promising 5,000 new U.S. jobs to help gain support for the deal, the Justice Department filed a complaint to fight the combination of the nation's No. 2 and No. 4 wireless carriers.