Following on the unspectacular yet solid performance of Verizon (NYSE:VZ, news, filings), telecommunications giant AT&T (NYSE:T, news, filings) seems to have had a similar quarter: nothing spectacular, but the sky isn’t falling either. Revenues of $31.1B weren’t spectacular but still respectable, and likewise EPS of $0.64 was basically inline with the street, it certainly does not appear to lend any support to the macroeconomic death spiral that the markets have been worrying about.
Wireless was of course the engine for growth, checking in at $12.86B in revenues. The net gain in wireless subscribers of 2.1M was a solid number, showing the continue strength of iPhone sales. Wireless data revenues were up 51%. Looking toward 2009, AT&T projected that wireless OIBDA margins should rise to the low 40s.
Wireline revenues of $17.07B were of course the weak spot, especially voice. The company of course looked at the bright side, with 14.2% growth in IP revenues, largely resulting from the uptake in U-verse. U-verse TV subscribers were also up 264K subscribers. Another positive sign was that the wholesale business managed to grow slightly again in Q4, continuing the recovery begun in Q3. However, landline losses were heavy enough to keep everyone sober.
Revenue growth in 2009 is expected to be in the low single-digit range, with wireless and IP growing while wireline voice contracts. While nobody will (or should) jump for joy at low single digit revenue growth, the overall economy will likely contract by a similar amount. So it seems that while the economy is slowing down the telecom space, it isn’t dragging it underwater. Yet at least.
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