AT&T income down but mobile business healthy

AT&T Inc.'s first quarter income was down 9% on essentially flat revenue, but its mobile business -- buoyed by its exclusive iPhone partnership with Apple Inc. -- continued to see healthy growth.

Total revenue for the quarter ended March 31 was $30.57 billion, down less than 1% from the year-ago quarter when revenue was $30.74 billion.

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% from $3.5 billion a year ago.

Diluted earnings per share were 53 cents, down 7% year over year. However, incremental pension/retiree benefits costs reduced EPS in the quarter by 5 cents 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% with $11.64 billion in revenue compared to $10.61 billion a year ago.

AT&T's data business showed 4.7% growth, with $6.25 billion in revenue compared to $5.97 last year.

AT&T's voice business showed the most decline -- 12.2% 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% 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% for the quarter and wireless data revenues also were up, with a 38.6% 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.

Copyright © 2009 IDG Communications, Inc.

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