AT&T Delivers Strong Third-Quarter Results; Growth Highlighted by Robust Wireless Gains, Advances in Enterprise Services, Accelerated TV Ramp

Tuesday, October 23rd, 2007
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  • $0.50 reported earnings per diluted share compared with $0.56 in the year-earlier third quarter
  • $0.71 adjusted earnings per diluted share, up 12.7 percent from $0.63 in the third quarter of 2006
  • Continued revenue growth ramp: $30.1 billion reported operating revenues, compared with $15.6 billion in the year-earlier third quarter; pro forma revenue growth of 3.2 percent, up from 2.0 percent year-over-year growth in the second quarter of this year
  • 2.0 million net gain in wireless subscribers to reach 65.7 million in service
  • 14.4 percent wireless revenue growth with wireless data revenues up 63.9 percent
  • Wireless operating income margin of 18.0 percent reported, 26.4 percent adjusted; 39.1 percent adjusted wireless OIBDA service margin, up from 35.6 percent in the year-earlier quarter
  • Further advances in enterprise customer revenues driven by a
    21.6 percent increase in Internet Protocol (IP) data revenues: year-over-year growth in recurring enterprise service revenues, second consecutive quarter of sequential growth in total and recurring enterprise revenues
  • 126,000 U-verseSM TV subscribers in service, up from 51,000 three months earlier; total video subscribers, including satellite and AT&T U-verse, up 215,000 in the third quarter to reach 2.1 million

SAN ANTONIO, Texas — AT&T Inc. (NYSE:T) today posted strong third-quarter results and delivered its tenth consecutive quarter of double-digit growth in adjusted earnings per share. Results included an increase in wireless subscribers of 2.0 million, further advances in enterprise business trends and accelerated expansion of AT&T’s next-generation TV service.

Wireline

AT&T’s third-quarter wireline results were highlighted by further advances in enterprise revenue trends and continued solid regional results including strong broadband gains and an accelerated ramp in AT&T U-verse video growth.

The following wireline highlights are based on pro forma revenue and volume comparisons that combine results from AT&T and BellSouth in all periods and include ongoing shifts in customer categories to reflect AT&T’s management of customer relationships. In the third quarter, AT&T delivered:

  • Further Improvement in Enterprise Trends Driven by Strong Volumes and 21.6 Percent Growth in IP Data Revenues. Total enterprise revenues were $4.8 billion, down 0.3 percent versus the year-earlier third quarter and up 1.0 percent sequentially. Recurring enterprise service revenues, which exclude CPE revenues as well as results from assets acquired during the past year, were up 0.3 percent versus the year-earlier quarter and up 1.4 percent sequentially. This marked AT&T’s second consecutive quarter of sequential growth in both total and recurring enterprise revenues and its fifth consecutive quarter of steady improvement in year-over-year comparisons for recurring enterprise revenues.
  • Solid Regional Business Growth Including 6 Percent Growth from Small and Midsized Firms. Total regional business revenues increased 3.4 percent versus the year-earlier quarter to $3.1 billion, continuing solid trends of recent quarters. Regional business data revenues, which make up 29.3 percent of the category, delivered 6.9 percent growth, led by gains in broadband, managed Internet, Ethernet and VPN services.
  • Accelerated Ramp in Video Services. At the end of the third quarter, subscribers to AT&T U-verse, the company’s next-generation, IP-based video service, totaled 126,000, up from 51,000 three months earlier. Weekly install rates in the final weeks of the quarter approached 10,000, up from approximately 5,500 three months earlier. Total video connections, which include AT&T U-verse service and bundled satellite television service, increased by 215,000 in the quarter to 2.1 million. At the end of the third quarter, 6.7 percent of AT&T’s primary consumer lines had a video solution from AT&T, up from 4.2 percent one year earlier.
  • Solid Broadband Gains. AT&T’s high speed Internet connections, which include DSL, AT&T U-verse high speed Internet and satellite broadband services, increased by 499,000 in the quarter to reach 13.8 million, up 2.2 million, or 18.6 percent, over the past year.
  • Continued Growth in Consumer Connections. AT&T regional consumer revenue connections (retail access lines, high speed Internet plus video connections) totaled 49.6 million at the end of the third quarter, up 895,000 or 1.8 percent over the past year, and regional consumer revenues grew 0.1 percent. Growth in connections reflects gains in high speed Internet and video over the past year totaling 2.7 million, which more than offset net declines in traditional retail consumer access lines.