AT&T Results Turn Sour: IPTV and Wireless Fade

AT&T (NYSE: T) is running out of new wireless customers to convert. It added only 1.9 million wireless subscribers in the last quarter to push its total to 87 million. The explosive growth in Apple, Inc. (NASDAQ: AAPL) iPhone sales certainly did not show up in AT&T’s results.

For the quarter ended March 31, 2010, AT&T’s consolidated revenues totaled $30.6 billion, up 0.3% compared to the same period last year.

First-quarter 2010 net income attributable to AT&T totaled $2.5 billion, or $0.42 per diluted share, reflecting a previously disclosed noncash charge of $995 million, or $0.17 per diluted share, related to recently enacted changes in the tax treatment for the Medicare Part D subsidy. Excluding this charge, first-quarter earnings would have been $3.5 billion, or $0.59 per diluted share. These results compare with net income of $3.1 billion, or $0.53 per diluted share, in the year-earlier first quarter.

The one bright spot in the wireless results for the company was that “wireless data revenues — from messaging, Internet access, access to applications and related services — increased $947 million–29.8%

AT&T’s wireless business also proved to be a disappointment, AT&T U-verse TV subscribers increased by 231,000 in the quarter to reach 2.3 million, an extremely weak sum give the company’s aspirations to replace cable in American homes.

The firm’s “consumer voice” business, the core of its wireline operation, fell again. Revenue was off 12% from last year to $7.5 billion. The billion difference with the same quarter last year is almost impossible to replace with other lines of business, or at least that is what AT&T’s results show.

Douglas A. McIntyre