AT&T (NYSE:T) on Tuesday reported stronger-than-expected earnings for the first quarter, and reached a milestone for its U-verse TV service, passing the 4 million subscriber mark.
The Dallas-based company said it added 200,000 subscribers to its TV service, and reported its high-speed Internet service had over 5.9 million subscribers at the end of the quarter.
Overall, the communications company said it had a 5.2 percent bump in earnings over the year-ago period, reporting $3.58 billion in profits, or 60 cents a share, up from $3.41 billion, or 57 cents, a year earlier.
Q1 revenue climbed to $31.8 billion, up $575 million, or 1.8 percent, from a year ago.
While AT&T's wireless and business units each grew nearly 20 percent in Q1, AT&T said its U-verse consumer revenues climbed 38.2 percent.
Overall, AT&T's wireline revenues and operating margins were up. Profit rose 2.4 percent to $1.8 billion on revenue of $14.9 billion, and operating income margin improved to 12.2 percent from 11.8 percent.
AT&T said strong growth in consumer IP data services in the quarter offset lower revenues from voice and legacy products.
Revenues from residential customers totaled $5.4 billion, an increase of 1 percent from a year ago; consumer broadband, video and voice over IP revenues now represent 55 percent of wireline consumer revenues, up from 47 percent in the year-earlier quarter; that segment saw 17.5 percent YoY growth.
Q1 2012 marked the seventh consecutive quarter of year-over-year growth in AT&T's wireline consumer revenues.
AT&T said U-verse penetration continued to improve and said a significant number of subscribers now were on triple- or quad-play options.
The high-speed Internet attach rate was more than 90 percent and about half of new subscribers took U-verse Voice. About three-fourths of AT&T U-verse TV subscribers have a triple- or quad-play option from AT&T.
ARPU for U-verse triple-play customers continued to grow, edging up slightly to $169.
Penetration of eligible living units continues to grow and was at 16.8 percent in the first quarter, and 27.1 percent across areas marketed to for 42 months or more. AT&T U-verse High Speed Internet delivered a first-quarter net gain of 718,000 subscribers to reach a total of 5.9 million, more than offsetting losses from DSL.
Overall, AT&T added 103,000 wireline broadband connections. About 45 percent of consumers have a broadband plan delivering speeds up to 6 Mbps or higher versus 35 percent in the year-ago quarter, the company said.
At 10:04 a.m., AT&T shares were trading at $31.66. The stock had a 52-week range of $27.29 to $31.97.
AT&T rival Verizon (NYSE:VZ) on Thursday reported its first-quarter earnings were up 16 percent, as revenue increased 4.6 percent on contract wireless and FiOS Internet (193,000) and video (180,000) subscriber gains. The company now has 5 million Internet subscribers and 4,.4 million FiOS TV subscribers.
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