AT&T: Mobile and broadband strong in Q4

iPhone customers add to subscriber base

AT&T Inc.'s revenue was up 2.9% in the fourth quarter of 2007, largely driven by increases in mobile phone and broadband customers, the company said today.

AT&T's pro forma revenue was $30.4 billion for the quarter, up 2.9% from a year earlier, when comparing combined revenue from AT&T, BellSouth and the former Cingular Wireless. AT&T acquired BellSouth and Cingular on Dec. 29, 2006.

A net gain of 2.7 million mobile subscribers helped drive up the year-over-year pro forma numbers, AT&T said in a news release. Most of those subscribers came to AT&T through its exclusive contract to provide service for Apple Inc.'s iPhone. Apple said on Tuesday that it sold 2.3 million iPhones during the quarter.

AT&T's official reported revenue for the fourth quarter, which ended Dec. 31, was $30.3 billion, up from stand-alone revenue of $15.9 billion in the fourth quarter of 2006. Those numbers were up slightly from the third quarter of 2007. Some merger-related costs account for the difference in revenue figures.

AT&T reported a net income of $3.1 billion for the fourth quarter of 2007, up from $1.9 billion, mostly due to its acquisition of BellSouth and Cingular.

In comparison, AT&T also had net income of $3.1 billion for the third quarter of 2007, with both quarters' numbers including income from BellSouth and Cingular, which was co-owned by AT&T and BellSouth.

The company's reported earnings per share was 51 cents, up from 50 cents in the fourth quarter of 2006. Excluding one-time charges, earnings per share was 71 cents, matching consensus earnings expectations by analysts polled by Thomson Financial. However, AT&T missed on the revenue side: Analysts had expected it to post $30.55 billion.

AT&T had an "excellent" fourth quarter, Randall Stephenson, AT&T's chairman, president and CEO, said in the statement. AT&T's mobile customer increase was the largest quarterly gain ever by a U.S. provider, he said. The company had 70.1 million mobile customers at the end of the year.

Stephenson also pointed to growth in AT&T's enterprise and broadband businesses. "These growth trends, combined with the significant opportunities we have for continuous cost improvements, reinforce the positive outlook we have for our business," Stephenson said. "AT&T has a terrific set of assets and an impressive record in terms of executing and delivering on targets, and I am very confident in our ability to drive strong results in 2008."

AT&T's mobile revenues were $11.4 billion, up 16.3% from the fourth quarter of 2006. Mobile data revenue was up 57.5%.

In AT&T's wireline business, the company had 231,000 subscribers to its U-verse IP-based video service at year's end, up from 126,000 at the end of the third quarter.

AT&T's broadband revenue grew 13.7% in the fourth quarter to $1.4 billion. Total high-speed Internet connections, which include DSL, AT&T U-verse high-speed Internet and satellite broadband services, increased by 396,000 in the quarter to reach 14.2 million, up by 2 million from the end of 2006.

Copyright © 2008 IDG Communications, Inc.

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