AT&T: U-verse driving change in business; telco adds 236,000 subs in Q3

AT&T (NYSE:T) said revenue and profits were up in the third quarter, driven by wireless growth and the continued strength of its U-verse business. The telco said revenues were $31.6 billion, up 2.8 percent or $847 million, from the same period a year ago.

Subscriber growth, said the Dallas-based company, was substantial with 236,000 new U-verse subscribers, and a whopping 2.6 million new wireless subscribers. AT&T reported a 30 percent increase in IP data revenues and the first year-over-year growth in wireline consumer revenue in more than two years.

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"This was a terrific mobile broadband quarter," said Randall Stephenson, AT&T chairman and chief executive officer. "A record number of customers signed new two-year contracts and integrated device sales outpaced our previous best by a wide margin. Wireless revenues continue to grow, churn is reaching record low levels, and postpaid ARPU increased for the seventh straight quarter.

"These trends add to our momentum and confidence," Stephenson said. "Mobile broadband is the industry's most powerful growth driver, and demand is in its early stages in both the consumer and business segments. AT&T is well positioned for the opportunities ahead."

AT&T said consolidated revenues totaled $31.6 billion, up $847 million, or 2.8 percent, versus the year-earlier quarter, marking the company's third consecutive quarter with a year-over-year revenue increase.

Third-quarter 2010 net income attributable to AT&T totaled $12.3 billion, or $2.08 per diluted share, including $1.53 in one-time gains from a previously disclosed tax settlement and the sale of Sterling Commerce. These results compare with reported net income attributable to AT&T of $3.2 billion, or $0.54 per diluted share, in the third quarter of 2009. Excluding one-time gains, earnings grew 3.8 percent to $0.55 per diluted share, compared to $0.53 per diluted share in the year-earlier quarter.

AT&T said that driven by strength in IP data services, in the third quarter, total revenue from residential customers totaled $5.3 billion, up 0.2 percent from the third quarter of 2009, the first year-over-year growth in more than two years.

In addition to the U-verse subscriber gains, AT&T said nearly 90 percent of subscribers took high-speed Internet services as well, and another 60 percent too U-verse voice services. In all, more than three-quarters of U-verse TV subscribers have triple- or quad-play contracts.

ARPU for U-verse customers was about $160.

For the second quarter in a row, U-verse revenues topped $1 billion; the $1.1 billion in revenues was up 84.5 percent from the like quarter a year ago and indicates that the popular service continued to drive a transformation in AT&T's consumer business. Consumer IP revenues now represent 42.6 percent of AT&T's wireline consumer revenues, up from 32.8 percent in the year-earlier quarter.

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