AT&Ts earnings report: Smartphone adds and low churn for wireless; Project VIP exceeds build out targets;U-Verse adds too
AT&T’s wireless revenues for the fourth quarter rose 4.8% year over year due mainly to a 16.8% increase in wireless data revenue. Wireless revenue hit $18.4 billion for the quarter and $5.7 billion of that came from data revenue. AT&T noted that data usage per smartphone increased 50 percent annually on its network.
1.2 million smartphones were added to AT&T’s wireless network during the fourth quarter from both new subscribers and from upgrades by existing subscribers. There were 5 million total smart phone additions in 2013. Smartphone adds are important because those subscriptions generate more average revenue per user than traditional cell phones.
While the revenue from mobile data rose, AT&T’s net postpaid adds, totaling 566,000 for the quarter, fell short of rivals Verizon (1.6 million) and T-Mobile (870,000). AT&T said there were tablet 440,000 net adds for the quarter.
AT&T reported a record-low Q4 postpaid churn of 1.11%- significantly lower than the 1.7% churn that T-Mobile says it experienced in the latest quarter.
AT&T added 194,000 TV subscribers in the fourth quarter, bringing the telecom’s total to 5.5 million. The carrier also added 630,000 U-verse broadband customers for a total of 10.4 million. “Plus we had our lowest TV churn ever in the fourth quarter,” Chief Financial Officer John Stephens told analysts Tuesday. Overall, AT&T earned 53 cents a share, higher than analysts had predicted, although the carrier warned of slowing growth in the current quarter. On the wireless side, AT&T added 809,000 subscribers, and profit margins exceeded analysts’ estimates on a 4.8% rise in revenue.
PCWorld/IDG News Service (1/28), Multichannel News (1/28), GigaOm (1/28), Bloomberg Businessweek (1/29)
AT&T’s press release:
AT&T Reports 20 Percent Adjusted EPS Growth, Record-Low Fourth-Quarter Postpaid Churn, Solid Smartphone Gains and Continued Strong U-verse Momentum in Fourth-Quarter Results
Full-Year 2013: Adjusted Revenue Gains of Nearly 2 Percent, Upper-Single Digit Adjusted EPS Growth and Nearly $23 Billion Returned to Shareowners
- $1.31 diluted EPS in the fourth quarter compared to $(0.68) diluted EPS in the year-ago period. Excluding significant items, EPS was $0.53 versus $0.44, up 20.5 percent year over year
- For full-year 2013, excluding significant items and Advertising Solutions, EPS was up 8.2 percent
- Fourth-quarter consolidated revenues of $33.2 billion, up 1.8 percent versus the year-earlier period
- More than 2 million new wireless and wireline high speed broadband connections added in the fourth quarter
- Full-year capital investment of $21 billion while exceeding Project VIP objectives
- $1.9 billion in share buybacks with 54 million shares repurchased in the fourth quarter; for the full year, the company repurchased 366 million shares, or more than 6 percent of shares outstanding, for $13.0 billion
- Nearly $23 billion returned to shareowners in 2013 through dividends and share repurchases
Nation’s Most Reliable 4G LTE Network Drives Revenue Growth, Smartphone Gains and Lowest-Ever Fourth-Quarter Postpaid Churn
- Wireless service revenues up 4.8 percent versus the year-ago quarter, total revenues up 4.5 percent
- Wireless data revenues up 16.8 percent versus the year-earlier period
- Total postpaid ARPU up 2.1 percent; phone-only ARPU up 3.9 percent
- Wireless operating income up $1.4 billion, or 54 percent; wireless EBITDA up $1.5 billion, or 35 percent; wireless operating income margin of 21.4 percent; EBITDA service margin of 37.4 percent
- Lowest-ever fourth-quarter postpaid churn at 1.11 percent
- More than one-half million branded smartphone net adds, both postpaid and prepaid
- 1.2 million new postpaid smartphones added (both upgrades and new subscribers); smartphones account for a record 93 percent of postpaid phone sales
- More than 1 million AT&T Next sales, 15 percent of all postpaid smartphone gross adds and upgrades
- 566,000 wireless postpaid net adds
- 440,000 branded tablet net adds
U-verse® Drives Wireline Consumer Growth and Broadband Gains
- Wireline consumer revenue growth of 2.9 percent versus the year-earlier period
- Total U-verse revenues, including business, up 27.9 percent year over year, now a $13 billion annualized revenue stream
- 10.7 million total U-verse subscribers (TV and high speed Internet) in service:
- 630,000 high speed Internet subscriber net adds; record annual net adds of 2.7 million
- 194,000 U-verse TV subscribers added, lowest churn in product history
- Continued U-verse broadband gains in the business customer segment, up 78,000, nearly doubling year-ago net adds
- Strategic business services growth accelerates with revenues up 17.4 percent year over year, now more than 25 percent of wireline business revenues
Note: AT&T’s fourth-quarter earnings conference call will be broadcast live via the Internet at 4:30 p.m. ET on Tuesday, Jan. 28, 2014, at www.att.com/investor.relations.
AT&T Inc. (NYSE:T) today reported solid fourth-quarter results with strong revenue and EPS growth driven by continued gains in the company’s key growth drivers — mobile and IP data, U-verse and strategic business services.
“2013 was the year of the network,” said Randall Stephenson, AT&T chairman and CEO. “With Project VIP, we’re delivering faster speeds and new services to millions more customers. And growth on these platforms is going strong. We exceeded build targets across the board. Our 4G LTE network is nearly complete and is the nation’s most reliable with lightning-fast speeds. U-verse is rapidly expanding, and our fiber-to-the-business build is off to a fast start.
“The next steps are to make our networks even more powerful and layer on services that will drive new growth in the years ahead. We have good momentum in areas like connected car, home automation and mobile business solutions. We’re also committed to transforming our operations to make them more responsive and efficient. To that end, we’ve launched Project Agile, a broad set of initiatives to streamline and improve every part of our business. Execution has begun and will be a focus area for us in 2014 and beyond.”