Telecommunications giant AT&T (NYSE:T, news, filings) reported its Q2 earnings this morning. On the wireless front, the company activated another 3.2M iPhones and added a net 1.6M wireless subscribers to reach 90.1M in service. Revenues of $30.8B were slightly under analyst projections, but entirely within the normal range. Earnings per share were $0.68, of which $0.07 came from a stock transaction with Telmex. Even excluding that, however, earnings per share of $0.61 outpaced expectations.
The company updated its 2010 earnings per share outlook from 'stable to improved' to 'strong', which means things are looking up. Guidance for operating income margins and free cash flow also advanced to 'improved'. Exactly what those verbal volleyballs mean in terms of the numbers is an entirely different question, but still. An improving profitability profile for AT&T would be a good thing for many in the sector, as its spending can be expected to become a bit more aggressive.
On the wireline front, revenues declined slightly sequentially but were basically flat. Consumer wireline revenues rose on the back of U-Verse, while business wireline revenues declined. The story is a familiar one, voice revenues continued to fall, while data revenues picked up most but not all of the slack. They saw 15.8% growth in strategic business services such as Ethernet, Virtual Private Networks (VPNs), hosting and application services over the same period last year. Growth in such services was 4.6% over the first quarter, implying some acceleration. Wireline voice customers fell to 25,780, which will surprise nobody.
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