Fresh from its acquisition of BellSouth, and the consolidation of its ownership in Cingular, AT&T issued its Q4 06 earnings report this morning showing strong financial results. For AT&T alone, prior to its acquisition of BellSouth and the remaining share of Cingular, revenues rose 23% year-over-year to $15.89 billion, while net income climbed 17% to $1.94 billion.
The picture isn’t quite as rosy on the revenue front once the acquisitions are taken into account (see table at end). The combined revenue of AT&T, BellSouth and all of Cingular rose only 2% year-over-year. Net income, however, soared 30% from Q4 05 to Q4 06.
Two of AT&T’s growth products in the residential market — DSL and multichannel video services — picked up a little steam sequentially, with the telco adding 564,000 net new DSL customers and 158,000 video customers (DBS partnership customers only) during the quarter.
Access lines, however, continued to plummet, with AT&T losing 1.06 million local phone lines during Q4 06.
During the earnings call, AT&T executives were pressed on the status of the company’s fiber-to-the-node video service initiative, U-verse. Despite placing great emphasis on U-verse as a key element of AT&T’s growth strategy, the company has experienced delays and has yet to reveal U-verse subscriber statistics — the telco first launched the multichannel video option in San Antonio in June 2006. AT&T has subsequently launched 10 U-verse markets.
In answer to a question about whether AT&T has a “Plan B” to tackle multichannel video subscriptions as part of a quadruple-play bundle of services, Chairman Ed Whitacre rebuffed the notion that U-verse is a problem. “It works and it works well. The network is good. All of the delays and the difficulties we have had relate to programming. This is our plan A and we’re sticking with our plan,” he said.
| Selected Key Statistics for Combined AT&T-BellSouth | ||||
| 1Q06 | 2Q06 | 3Q06 | 4Q06 | |
| Total access lines (mil.) | 68.57 | 67.25 | 66.13 | 65.06 |
| Net change in access lines | (0.88) | (1.32) | (1.13) | (1.06) |
| DSL customers (000) | 10,577 | 11,047 | 11,597 | 12,161 |
| Net change in DSL | 774 | 470 | 550 | 564 |
| Video customers (000) | 1,119 | 1,224 | 1,342 | 1,500 |
| Net change in video customers | 139 | 105 | 118 | 158 |
| Wireless Voice Customers (000) | 55,810 | 57,308 | 58,666 | 60,962 |
| Net change in wireless customers | 1,666 | 1,498 | 1,358 | 2,296 |
| Total operating revenues (mil.)* | $28,955 | $29,256 | $29,444 | $29,604 |
| Net Income (mil.)* | $ 3,869 | $ 4,575 | $ 5,466 | $ 5,026 |
| *Includes 40% share of BellSouth ownership in Cingular not previously reported in BellSouth earnings reports. | ||||
| Source: Emerging Media Dynamics, Inc. analysis of company data. © 2007. | ||||
Cynthia Brumfield at 12:16 PM|Comments(0)
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