8 Companies That Reported Massive Losses in Q4

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Feb 16, 2015

What happens when companies generate a lot of profit? Shareholders probably high-five each other with happiness. But what happens when companies lose money? Well, eight of the RUSSELL 1000 companies reported losing a whooping $1 billion or more during the last quarter, including Apache, AT&T Inc. This analysis is according to USA TODAY based on net income reported by the companies. Data for the same is collected by S&P Capital IQ.

Loss Story

Apache Corporation (APA, Financial) seems to have reported the most loss losing around $4.8 billion in the fourth quarter. AT&T Inc. (T, Financial) followed with a loss of $4.0 billion. At the third place, Occidental Petroleum Corporation (OXY, Financial) reported losses of $3.4 billion. This was followed by Freeport-McMoran, Inc. (FCX, Financial) which lost $2.9 billion in the last quarter. Sprint Corporation (S, Financial), Verizon Communications Inc. (VZ, Financial) and Prudential Financial, Inc. (PRU, Financial) lost $2.4, $2.2 and $1.4 billion respectively. Lastly, Cliffs Nat’l (CLF, Financial) suffered losses of $1.2 billion.

However, these losses are on the basis of the rules that are outlined by accountants. Many charges and non-cash expenses are not included in the “adjusted” earnings. These “adjusted” earnings help to compare profits to official estimates. In a way, these figures help to measure the magnitude of net losses. 368 companies in the S&P 500 have reported. There may be chances that more companies are yet to report their losses, but the data available is enough for analysis.

It shouldn't come as a surprise that the oil industry has reported the biggest losses. Apache Corporation, the oil-field company is the big daddy that has reported the most losses. Apache, the oil and gas corporation suffered due to the fall in oil prices. The revenue fell 14% to around $3 billion in the fourth quarter. With the company's expenses, the loss was estimated at $4.8 billion.

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Following the oil industry, telecom company AT&T lost $4 billion in the last quarter. The company made a whooping $6.9 billion profit last year, but this year was a bane. The loss that AT&T suffered was due to the string of charges that investors ignored. Occidental Petroleum's earnings did report very bad news, but the company made progress in the spinoff of California Resources Corporation. This energy company reported a compressed fourth-quarter losses of $3.4 billion last quarter.

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Freeport-McMoRan Inc. reported net loss attributable to common stock of $2.75 per share, or $2.9 billion for the fourth quarter of 2014. This was a huge setback as compared to the net income of $707 million, or $0.68 per share, for the fourth quarter of 2013. Sprint Corp reported smaller losses, though significant, of $2.4 billion. The losses were mainly due to shutdown of one of their networks along with a massive overhaul of their remaining network. Thus the quality of phone calls had a direct impact on the company's earnings. However, the losses were less than main rivals Verizon Wireless and T-Mobile US (TMUS, Financial).

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Verizon Communications Inc. reported a 4Q loss of $2.23 billion on pension costs. This figure met the analysts' expectations for the telecom giant. The company added 672,000 net postpaid phones and 1.4 million new tablets as well as 2.1 million net retail connections during the fourth quarter. 54 cents per share losses were reported. Finally, life insurer Prudential Financial Inc. lost around $2.4 billion in the last quarter due to dollar's strength against the Japanese yen.