Earnings: AT&T Net Income Falls 23.6 Percent; iPhone Subsidies Continue To Bite

This story was written by Dianne See Morrison.
Fourth quarter earnings fell 23.6 percent at AT&T (NYSE: T), which posted net income of $2.4 billion, or 41 cents a share, on revenue of $31.1 billion. Last year, the telecoms giant reported earnings of $3.1 billion, or 51 cents per share. It reported adjusted earnings of 64 cents a share, falling just shy of the $0.65 share estimate from a *Thomson Reuters* poll of analysts. Revenues, which grew 2.4 percent, meeting analyst expectations, were boosted by 13.2 percent growth in its wireless unit and a 14.2 percent increase in wireline IP data revenues. Wireless revenues were up 13 percent to $11.5 billion, while the wireline business contracted 3.3 percent to $17 billion. Voice revenues, however, were hard hit, as expected, falling 10 percent to $9 billion. The iPhone continued to lure users to its wireless unit, but subsidies of the handset continued to hit EPS. AT&T said $0.07 of the EPS came from its iPhone subsidies, as well as hurricane related expenses and forex impacts. Wireline results are below, and coverage on the wireless unit's performance is on mocoNews.net...

U-verse TV service subs up: AT&T had a net gain of 264,000 subscribers to its U-verse TV service in the fourth quarter, up from 232,000 in Q3. At the end of the quarter, subscribers to IP-based TV service totaled "more than 1 million", hitting their own goal of 1 million by the end of 2008.

IP data revenues: Total IP data revenueswhich includes U-verse services as well as VPN's and managed internet services, grew 14.2 percent to $2.9 billion in Q4. Consumer IP data revenues, which include broadband and AT&T U-verse services, grew 21.4 percent, and retail business IP data revenues grew 11.4 percent. IP services now account for 45.2 percent of AT&T's total wireline data revenues, up from 41.5 percent in the year-earlier fourth quarter and 37.2 percent two years ago.

Broadband connections up: At the end of the third quarter, AT&T's wireline and wireless broadband subscribers totaled 16.3 million up 10.3 percent from last year. Of those, 13 million were wireline connections.

Release | Presentation | Conference Call


By Dianne See Morrison
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