AT&T (NYSE:T) closed the regular session on Wednesday up 0.14 percent at $35.28 per share, and remained relatively flat in post-market trading after reporting third-quarter financial results that were consistent with expectations. Consolidated revenues increased 2.2 percent on the year to $32.2 billion, narrowly beating the mean analyst estimate of $32.19 billion. Adjusted earnings climbed 6.5 percent on the year to 66 cents per share, also beating the mean analyst estimate of 65 cents per share. AT&T added 2 million new wireless and highline broadband subscribers in the quarter.
Total wireless revenues revenues — which includes equipment sales — climbed 5.1 percent on the year to $17.5 billion, and accounted for nearly 50 percent of total revenues. Wireless operating income climbed 3.5 percent on the year to $4.6 billion, or about 74 percent of total third-quarter operating income of $6.2 billion. Net income attributable to AT&T increased 5.5 percent to $3.8 billion.
AT&T wireless logged 363,000 net post-paid additions with a churn of 1.07 percent, down just slightly from 1.08 percent in the year-ago period. Average revenue per user increased 1.5 percent on the year to $66.20.
Commenting alongside the earnings release, AT&T Chairman and CEO Randall Stephenson said that the company’s “fiber and U-verse expansion projects are ahead of schedule bringing high-speed broadband to millions more customers. With these initiatives, we’re seeing excellent growth across our major platforms — mobility, U-verse and strategic business services.”
U-verse, AT&T’s TV and high-speed Internet service, now claims 10 million total subscribers, adding 655,000 Internet subscribers and 265,000 TV subscribers in the third quarter. AT&T reports that the segment now has an annualized revenue stream of $12 billion, with segment revenues climbing 28.1 percent. Business services revenues climbed 15.7 percent.
AT&T reports that 50.6 million postpaid phone subscribers, or 75 percent of the total, had smartphones at the end of the third quarter, up from 66 percent in the year-ago period. This is a significant increase because ARPU for smartphone customers is more than double that of a non-smartphone user.
AT&T sold 6.7 million smartphones in the third quarter.
AT&T is the second-largest wireless carrier in the United States, and while business is good it still faces tough competition from Verizon (NYSE:VZ), the largest. The carrier recently reported that revenues climbed 4.4 percent on the year to $30.3 billion, and that it added 1.1 million new wireless customers. Earnings climbed 20.3 percent on the year to 77 cents per share, beating expectations for 74 cents.
Verizon also offers TV and Internet packages that compete with AT&T. Verizon’s broadband service, FiOS, showed a growth in revenue of 13.4 percent year-over-year, with the service accounting for 72 percent of total consumer revenue. FiOS Internet subscribers grew 173,000 to reach 5.9 million, and video subscribers grew 135,000 to reach 5.2 million during the quarter.
On the horizon for Verizon is a $130 billion deal to acquire British carrier Vodafone’s (NASDAQ:VOD) 45 percent stake in Verizon Wireless. That deal is expected to close in the first quarter of 2014 and will give Verizon complete control over the nation’s largest 4G LTE network.