AT&T Reports Growth, But There’s a Catch
AT&T (NYSE:T) has said that its second-quarter TV, internet, and mobile phone subscriber growth has improved from a year earlier. The biggest mobile phone carrier in the U.S. is expecting to report 500,000 new mobile-phone subscriptions for the quarter, the company said in a report released Thursday.
That number almost doubles the 296,000 new subscriptions the carrier gained in the same time period last year. But the increase in subscriptions isn’t all good news. The money spent to draw in new customers cut into the company’s profits, with overall margins declining compared to the second quarter of 2012. AT&T attributed the decline in profit to “customer additions and investments in new growth opportunities.”
The Dallas-based company is still expecting a revenue growth of at least 2 percent for 2013, counting on video and internet service to fuel its growth as the traditional phone business continues to shrink.
AT&T expects to report an additional $1 billion in cash proceeds from its recent sale of shares in Mexican wireless provider America Movil, also known as AMX, in addition to a distribution from yellow-pages publisher YP Holdings LLC in which AT&T holds stake.
AT&T has sold $564 million in shares in America Movil over the last month, and it’s rumored that the company will use the cash to make a joint bid for Hulu LLC with investment and media company Chernin Group that could top $1 billion. The online video streaming company Hulu has been in the midst of an intense bidding war as more people choose to get their TV from online streaming services instead of traditional cable networks. Hulu is currently owned by Walt Disney Co. (NYSE:DIS), Comcast Corp. (NASDAQ:CMCSA), and and News Corp. (NASDAQ:NWSA).
AT&T has a long relationship with America Movil. Both AT&T and analysts have said the company will keep its shares in America Movil at the historical level of 9 percent. AT&T has not addressed the Hulu rumors.
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