AT&T Income Down but Mobile Business Healthy
AT&T's first quarter income was down 9 percent on essentially flat revenue but its mobile business -- buoyed by its exclusive iPhone partnership with Apple -- continued to see healthy growth.
Total revenue for the quarter ended March 31, 2009, was US$30.57 billion, down less than 1 percent from the year-ago quarter when revenue was $30.74 billion.
Indeed, AT&T's revenue has been hovering around the $30 billion mark for several quarters since the company subsumed BellSouth and Cingular Wireless at the end of 2006 and revenue more or less doubled.
Net income for the quarter was $3.1 billion, down nearly 10 percent from $3.5 billion a year ago.
Diluted earnings per share (EPS) were $0.53, down 7 percent year over year from $0.57. However, incremental pension/retiree benefits costs reduced EPS in the quarter by $0.05 a share.
AT&T's wireless and data businesses showed growth for the quarter while other key segments -- voice and directory -- declined. Wireless in particular had a good quarter, up 9.8 percent with $11.64 billion in revenue compared to $10.61 billion a year ago.
AT&T's data business showed 4.7 percent growth, with $6.25 billion in revenue compared to $5.97 last year.
AT&T's voice business showed the most decline -- 12.2 percent year over year to $8.5 billion in revenue from $9.69 billion a year ago. Its directory business -- the smallest of its main segments -- declined sharply as well, down 10.7 percent from $1.4 billion to $1.25 billion.
AT&T said it had a net gain of 1.2 million in total wireless subscribers in the quarter to reach 78.2 million. The company attributed that growth mainly to the iPhone 3G, 1.6 million of which it said it activated in the quarter.
Wireless operating income margin was 26 percent for the quarter and wireless data revenues also were up, with a 38.6 percent increase to $3.2 billion, the company said. That figure is more than double the total for the first quarter two years earlier, growth AT&T said was driven by messaging, Internet access, e-mail, access to applications and related services.
AT&T also reported growth in subscribers to its U-verse offering -- a package of television, high-speed Internet, DVR and voice services -- as well as other broadband services. Its U-verse service had a net increase of 284,000 subscribers to reach 1.3 million, and broadband connection subscriptions -- counting both wireline subscribers and LaptopConnect card users -- increased by 471,000 subscribers to reach 16.7 million, the company said.