AT&T;’s profit and sales double
Telecommunications heavyweight AT&T; Inc. reported Tuesday that it doubled its profit and sales in the first three months of the year, primarily because of its completed acquisition of BellSouth.
Profit reached $2.85 billion, helped by the acquisition of BellSouth and growth in wireless revenue. The earnings, which included $2.3 billion in acquisition-related charges and a $409-million gain from the sale of some assets, amounted to 45 cents a share for the period that ended March 31. That was up from $1.45 billion, or 37 cents a share, earned by AT&T; in the first quarter of 2006, when it had not yet acquired BellSouth.
First-quarter revenue rose 84% to $28.97 billion, up from a pre-merger tally of $15.76 billion a year earlier.
“Our integration is on track,” Chief Financial Officer Rick Lindner said.
The wireless unit, which is being rebranded from Cingular to AT&T;, added 1.2 million customers, finishing the quarter with 62.2 million. It also generated higher revenue from non-voice services including text messaging, Web browsing and content downloads.
The company also reaffirmed its previous revenue guidance for the year, saying it continued to expect a revenue growth percentage in the mid-teens.
Excluding merger-related costs, accounting changes and the previously announced sale of wireless assets, the company earned 65 cents a share, or 4 cents a share more than the average forecast among analysts surveyed by Thomson Financial.
But shares of San Antonio-based AT&T;, which have been trading at a five-year high in recent weeks, fell 67 cents, or 1.7%, to $39.10.
AT&T;’s wire line connections continue to decrease as customers migrate away from traditional telephone service. Across the 22 states where AT&T; is the dominant provider of local phone service, the company lost 285,000 lines in the first quarter, more than the 251,000 lost in the same period in 2006 but fewer than it lost in the fourth quarter.
After numerous delays and stumbles, the crucial rollout of the company’s premium television service, U-verse, now has 20,000 subscribers, up from 18,000 at the close of the quarter and just 3,000 at the start of the year.
