AT&T Hits Its Numbers, Thanks to Strong Wireless Growth
Concerning 2010 guidance, AT&T said it "expects to deliver stable consolidated revenues and stable-to-improved consolidated operating income margins," but it did not provide specific revenue/earnings guidance.
Wireless Grows, Wireline Shrinks More Slowly
In the quarter, AT&T added 2.7 million net total wireless subscribers -- the second-highest quarterly gain in the company's history, with full-year wireless increases of 7.3 million, the company's best ever. Average monthly wireless churn fell to 1.19% in the quarter, down from 1.20% in fourth-quarter 2008.
Further, wireless data revenue -- with includes text messages, Internet service and access to applications and related services -- continued to grow at an impressive rate -- surging $805 million in the quarter, or by 26.3% to $3.9 billion.
AT&T showed some improvement in the quarter's landline revenue, which AT&T calls wireline revenue. That category fell 5.3% to $16.2 billion, the lowest year-over-year and sequential declines in the past four quarters. AT&T attributed the smaller drop to an improved revenue mix and solid growth in Internet protocol-based revenues. Landline voice revenue -- which includes retail/wholesale local and long-distance calling -- fell 13.3% to $7.8 billion in the quarter.
In all, this appears to be another good quarterly report for AT&T. Its ability to transition to new businesses while cutting costs and meeting earnings expectations amid challenging economic conditions (to say the least) is no small achievement, and it bodes well for the quarters and year ahead. A $1.68 annual dividend adds to the positive mix for the stock.