AT&T -1.7% AH; postpaid adds increase, but service rev. growth slows

AT&T (T) had 625K postpaid net adds in Q1 (313K via branded tablets), up from 566K in Q4. Connected device net adds totaled 693K; prepaid and reseller net losses respectively totaled 50K and 206K.

However, wireless service revenue rose just 2.2% Y/Y, down from 4.8% in Q4 (did price cuts play a role?). Meanwhile, wireless op. margin only rose 30 bps to 28.3% after growing 690 bps in Q4.

Churn was at 1.39% vs. 1.43% in Q4 and 1.38% a year ago. Smartphones now account for 78% of AT&T's postpaid base, up from 77% in Q4 and 72% a year ago. AT&T's Next upgrade program saw 2.9M sign-ups. That contributed to a 52% Y/Y increase in equipment sales (pressured margins).

Total wireless subs +8% Y/Y to 116M. Postpaid subs +4% to 73.3M.

Wireline revenue fell 0.4% Y/Y vs. 1.4% in Q4; op. margin fell 110 bps to 10%. 634K and 201K U-verse Internet and TV subs were added vs. 630K and 194K in Q4. Total U-verse revenue rose 29% Y/Y.

Wireline voice connections -11% Y/Y to 27.7M, broadband connections nearly flat at 16.5M, video connections +19% to 5.7M.

$1.2B was spent on buybacks, down from $1.9B in Q4. AT&T is reiterating full-year capex and free cash flow guidance of $21B and $11B, respectively.

Q1 results, PR

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Comments (3)
  • Rose_Colored_Glasses
    , contributor
    Comments (1110) | Send Message
    Good news Bad News. Bad news = I will take a haircut on my T tomorrow. Good news = will get more shares on my DRIP at the end of the month. Will own T when they shovel dirt on me.
    22 Apr 2014, 05:02 PM Reply Like
  • Stock_doc
    , contributor
    Comments (348) | Send Message
    My sentiments exactly RCG.
    22 Apr 2014, 05:44 PM Reply Like
  • King Rat
    , contributor
    Comments (1723) | Send Message
    As a past and possibly future T holder, I think we would all benefit if T gave out haircuts every quarter until our descendants are ready to sell.


    As part of a wedding present I charted a couple of friends' past 11 years of mutual funds on Excel. Via reinvesting, their "best" year as far as reinvested share accumulation goes, was 2009 when the fund paid out 70% more shares than 2007 when the fund originally peaked. So yes, for long term holders, temporary haircuts are a good thing.
    22 Apr 2014, 09:00 PM Reply Like
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