The industry's 800lb gorilla AT&T (NYSE:T, news, filings) reported Q1 earnings today, with few surprises. Revenues of $30.6B were in-line, and earnings per share of $0.59 was a nickel above expectations after discounting that non-cash health care charge everyone was talking about last month. AT&T's earnings releases always amaze me. For a company that seems to report quarterly revenue in a tight range of $30.5-30.9B quarter after quarter after quarter after quarter, they always have such a long list of high growth segments to highlight - but that's what their PR guys get the big bucks for I guess.
Net wireless contract additions fell to 512K, a bit lower than the 600K that had been anticipated. Without the iPhone they would have lost customers this quarter, as they turned up 2.7M of them, two thirds of which upgraded from other AT&T phones. As many analysts have noted, the wireless market in the US is approaching saturation. That means that to grow carriers either have to find new services to sell such that customers spend more money, or steal customers from the competition whether by superior value or superior gimmicks.
On the wireline side, AT&T saw a reasonable resurgence in consumer broadband growth, adding 255K net subscribers - another signal that the economy is improving and some of those purse strings are loosening. They also saw some stability returning to the business voice and data business, which was hard hit during the recession. Consumer voice connections fell to 26.6M, which of course surprised no one.
Two rather common items that didn't make it into AT&T's long earnings PR were LTE and wholesale. Hmmm.
Verizon reports tomorrow, likely with a similar story - just replace the iPhone with FIOS.
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