mocoNews.net - Earnings: AT&T Reports Rise In Revenue; Boosted By iPhone, Wireless Growth

AT&T ( NYSE: T), the US's largest telecoms company reported today Q3 net income of $3.2 billion, or 55 cents a share, on revenue of $31.3 billion. This compares to last year's Q3 profit of $3.06 billion, or 50 cents a share. It reported adjusted earnings of 67 cents a share, falling short of the 71 cents a share estimate from a Thomson Reuters ( NASDAQ: TRIN) poll of analysts. But the adjusted eps includes 10 cents for Apple ( NSDQ: AAPL) iPhone subsidies--or what AT&T called "pressure generated by strong performance from the Apple iPhone 3G initiative".

AT&T chairman and ceo Randall Stephenson had nothing but praise for the iPhone, saying in a statement he was "particularly pleased" with the customer response. The iPhone helped drive customer acquisitions, as well as boost revenues at the wireless unit, which saw a 15.4 percent growth in revenues. AT&T's total wireless revenues came in at $12.6 billion, and wireless service revenues, which exclude handset and accessory sales, grew 14.3 percent to $11.3 billion. Retail postpaid subscriber ARPU was $58.99, up 2.6 percent versus the year-earlier third quarter. Iphone 3G activations totaled 2.4 million in the quarter, with approximately 40 percent of them new customers for the operators. The iPhone was also delivering a better class of subscribers--"high value" ones with "significantly higher ARPU and lower churn than postpaid subscriber average." iPhone ARPU was 1.6 times higher, coming it at $95 compared to $58.99 for non iPhone users. AT&T expects its dilution associated with the iPhone 3G to "run above its previous expectation.

Other Highlights:

-- Wireless customer additions. AT&T posted the largest postpaid net subscriber gain for any quarter in its history--boosted by the iPhone. Retail postpaid net subscriber additions of 1.7 million were up nearly 40 percent versus results in the year-earlier third quarter and accounted for more than 85 percent of AT&T's 2.0 million total wireless net adds. Total monthly subscriber churn in the third quarter was 1.7 percent, flat with results for the year-earlier quarter, and postpaid churn was 1.2 percent, down from 1.3 percent in the third quarter of 2007.

-- Wireless data revenues surging: Wireless data revenues grew 50.5 percent versus the year-earlier quarter to $2.7 billion. This includes eflecting strong internet access, messaging, e-mail and related services. Wireless internet access revenues more than doubled versus results for the year-earlier quarter, and multimedia message volumes were also more than double third-quarter 2007 levels.

-- U-verse TV service subs up: AT&T had a net gain of 232,000 subscribers to its U-verse TV service in the third quarter, up from 170,000 added in the second quarter of this year. At the end of the quarter, subscribers to IP-based TV service totaled 781,000. AT&T believes they exceed their target of more than 1 million U-verse TV subscribers by year-end 2008. Attach rates for broadband service are more than 85 percent.

-- Wireline IP data revenues up: Consumer IP data revenues, which include broadband and U-verse services, grew 19.0 percent, and business IP data revenues were up 14.7 percent. IP data now accounts for 44.0 percent of AT&T's total wireline data revenues.

-- Broadband connections up: At the end of the third quarter, AT&T's wireline broadband subscribers totaled 14.8 million, up 148,000 in the quarter and 1.1 million over the past year.

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