Driven by the growth of its U-verse platform and subscriber gains in its wireless postpaid business, AT&T (NYSE: T) reported a 1.6 percent increase in second quarter consolidated revenue to $32.6 billion, and an 8 percent drop in operating income to $5.6 billion on a 4 percent uptick in operating expenses.
The revenue performance missed investor consensus forecast by about $840 million, while a reported earnings per share of 62 cents narrowly missed the target by 1 cent.
AT&T reported 3 percent year-over-year revenue growth for its U-verse residential operations to $5.7 billion, with U-verse pay TV subscribers increasing by 190,000 to 5.9 million total. That's not as good as the 233,000 video subs added in Q2 2013, bit it outstrips the 100,000 adds reported Tuesday by IPTV rival, Verizon FiOS (NYSE: VZ). AT&T added 200,000 U-verse video subscribers in the first quarter of 2014.
The U-verse service also added 488,000 high-speed Internet subscribers in the quarter for a total of $11.5 million.
Overall, U-verse accounted for 62 percent of AT&T's total consumer wireline business in Q2, up from 51 percent in the second quarter of 2013.
AT&T Mobility, meanwhile, added more than 1 million net postpaid subscribers in Q2, its best performance in the postpaid market in nearly five years. The majority of AT&T's postpaid adds came from smart phones, which was in direct contrast to Verizon's Tuesday earnings report, which indicated that tablets made up the bulk of its postpaid adds.
AT&T said total wireless subscribers increased by 634,000 in the quarter, led by just over 1 million postpaid net adds and 175,000 connected device net adds.
"The quarter was marked by several transformative moves to grow our wireless, broadband and video services," said Randall Stephenson, AT&T chairman and CEO. "We announced our intent to acquire DirecTV (NASDAQ: DTV), which will improve our video position and our ability to bundle broadband, mobility and video services nationally. Our move to simple pricing and no-device-subsidy plans is repositioning the wireless business model, resulting in our best postpaid net adds in nearly five years and our lowest-ever postpaid churn. And our Project VIP investments continue to drive impressive growth in U-verse and strategic business services."
Source: http://cablequest.org/news/international-news/item/5564-at-t-s-growing-u-verse-now-controls-62-of-company-s-consumer-wireline-business.html
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