AT&T grows Q2 profit 10%, revenues stable

News General United States 24 JUL 2012
AT&T grows Q2 profit 10%, revenues stable
AT&T reported second-quarter earnings of USD 0.66 per share, up 10 percent from a year earlier. Revenues were up just 0.3 percent to USD 31.6 billion, as the sale of its advertising business offset continued growth in mobile services. Operating profit improved to USD 6.8 billion from USD 6.2 billion a year ago, and the margin rose 2 percent points to 21.6 percent. After capex of USD 4.5 billion, free cash flow totaled USD 5.1 billion. 

AT&T Wireless grew revenues 4.8 percent, including a 4.3 percent rise in services, to a total USD 16.4 billion. Data revenues increased 18.8 percent to USD 6.4 billion, led by growing sales of smartphones and connected devices. The EBITDA service margin improved to 45.0 percent, from 41.1 percent in the second quarter of 2011, and wireless operating profit was up 17.8 percent to USD 5.0 billion. 

The company added a net 1.3 million new mobile customers in Q2, including 320,000 postpaid, 92,000 prepaid, 382,000 connected devices and 472,000 from resellers. The total base numbered 105.2 million at end-June. After sales of 5.1 million smartphones in the quarter, 61.9 percent of AT&T's postpaid subscribers were using the data devices at end-June. About two-thirds of these are now on tiered data plans. 

At the wireline division, revenues fell 0.8 percent from a year ago to USD 14.9 billion, while operating profit was up 2.2 percent to USD 2.1 billion. The drop in business revenues slowed to 1.5 percent, to USD 9.1 billion, while consumer revenues rose 1.7 percent to USD 5.5 billion, driven by U-verse services. U-verse TV added 155,000 subscribers to reach 4.1 million at end-June, and U-verse broadband customers rose by 553,000 to a total 6.5 million, helping offset losses from DSL. 

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