AT&T reported first-quarter revenues down 1.5 percent to USD 31.4 billion, while EPS improved to USD 0.67 from USD 0.60 a year earlier. The results were impacted by the sale of its Advertising Solutions units; excluding this, EPS rose 8.5 percent to USD 0.64 and revenues were up 0.9 percent. Operating profit fell to USD 5.9 billion from USD 6.1 billion a year ago, and the margin dropped to 18.9 percent from 19.2.
The US operator generated USD 8.2 billion in operating cash flow and spent USD 4.3 billion on capital equipment in the quarter. AT&T maintained its capex budget for the full year at USD 21 billion, but cut planned spending for 2014 and 2015 to around USD 20 billion per year from USD 22 billion previously. The company said it expects savings through greater integration efficiencies in its Project VIP, accelerating LTE build in 2013 and other ongoing initiatives. The LTE network now reach nearly 200 million POPs and is expected to reach nearly 90 percent of the planned 300 million POPs by the end of 2013.
At the Wireless division, revenue growth slowed to 3.4 percent in Q1, with service revenues also up 3.4 percent to USD 15.1 billion. Operating profit rose 4.1 percent to USD 4.7 billion. AT&T added a net 291,000 new lines in the quarter for a total 107.25 million at the end of March. That included a net 296,000 new postpaid subscribers, for a total 70.75 million. Growth was led by 365,000 new tablet users, while prepaid had a net loss of 184,000 subscribers, and resellers shed 252,000 lines.
With another 6.0 million smartphones sold in the quarter, AT&T now has 72 percent of its postpaid base using smartphones. This helped drive a 21 percent increase in mobile data revenues to USD 5.1 billion. Total ARPU fell to USD 46.89 from USD 46.94 in Q4, due to the higher share of low-revenue tablet users. Postpaid added just 3 cents from the previous quarter, to USD 65.01. ARPU was still up from a year earlier, and the EBITDA margin on service revenues rose to 43.2 percent from 42.3 a year ago.
At the Wireline division, revenues fell 1.8 percent year-on-year to USD 14.7 billion, as a 3.4 percent decline in the business market offset 2.0 percent growth in consumer revenues. Operating profit fell 5.1 percent to USD 1.6 billion.
Consumer growth was led by the U-verse services, which grew revenues 38 percent year-on-year. AT&T added 232,000 U-verse TV subscribers in the quarter for a total 4.8 million, and U-verse broadband users rose by 731,000 to 8.4 million. This helped total broadband customers grow by a net 124,000 to 16.51 million, its best performance in nine quarters. Consumer voice subscribers fell by 266,000 to 17.96 million at the end of March.
