Monday, October 22, 2007

AT&T Posts Double Digit Wireless Growth, Steady Broadband Gains

Citing double-digit increase in wireless revenues, improved business services sales and steady broadband gains, AT&T posted strong third-quarter results and delivered its tenth consecutive quarter of double-digit growth in adjusted earnings per share. AT&T's pro forma Q3 revenue, which combine revenues from AT&T, BellSouth and Cingular Wireless consistently for all periods, totaled $30.3 billion, up 3.2 percent versus results for the year-earlier quarter. This increase is up from year-over-year growth of 2.0 percent in the second quarter of 2007 and 1.7 percent in the quarter before that. Sequentially, versus the second quarter of this year, pro forma revenues were up 1.8 percent. AT&T's reported net income for the third quarter totaled $3.1 billion compared with $2.2 billion in the year-earlier quarter. Reported earnings per diluted share totaled $0.50 versus $0.56 in the third quarter of 2006.

"At AT&T, our goal is to connect people with their world, everywhere they live and work, and do it better than anyone else... Wireless subscriber gains stepped up dramatically. Our enterprise business has greatly improved momentum. Broadband growth is solid. And our AT&T U-verse TV install rate already approaches our year-end target of 10,000 per week," said Randall Stephenson, AT&T chairman and chief executive officer.

Some highlights for the quarter:

  • In the first three quarters of 2007, cost savings from BellSouth and AT&T Corp. merger integration totaled approximately $2.8 billion, approximately 70 percent expense and 30 percent capital.

  • Capital expenditures totaled $4.7 billion in the third quarter and $12.1 billion for the first three quarters of 2007.

  • AT&T ended Q3 with 65.7 million wireless subscribers. There was a net gain of 2.0 million wireless subscribers, the highest third-quarter subscriber increase in the company's history. Third-quarter retail postpaid net adds totaled 1.2 million, up 30.6 percent compared with postpaid subscriber additions in the year-earlier quarter. Gross wireless subscriber additions totaled 5.3 million in the third quarter, up 15.8 percent versus third-quarter 2006 results.

  • Wireless monthly subscriber churn was 1.7 percent, down 10 basis points versus the year-earlier third quarter.

  • AT&T's wireless revenues totaled $10.9 billion, up 14.4 percent from the year-earlier quarter.

  • Wireless data revenues increased 63.9 percent versus results in the year-earlier quarter.

  • Wireless service ARPU, which was $50.82 in the third quarter, up 2.0 percent versus the year-earlier quarter. Postpaid ARPU growth was even stronger, up more than 5 percent.

  • Total enterprise revenues were $4.8 billion, down 0.3 percent versus the year-earlier third quarter and up 1.0 percent sequentially.

  • At the end of Q3, AT&T U-verse had 126,000 subscribers, up from 51,000 three months earlier. Weekly install rates in the final weeks of the quarter approached 10,000, up from approximately 5,500 three months earlier. Total video connections, which include AT&T U-verse service and bundled satellite television service, increased by 215,000 in the quarter to 2.1 million.

  • U-verse TV is now offered in 33 markets. AT&T approached 10,000 installations per week toward the end of Q3.

  • At the end of the third quarter, 6.7 percent of AT&T's primary consumer lines had a video solution from AT&T, up from 4.2 percent one year earlier.

  • Broadband connections, which include DSL, AT&T U-verse high speed Internet and satellite broadband services, increased by 499,000 in the quarter to reach 13.8 million, up 2.2 million, or 18.6 percent, over the past year.