A Hard Quarter For AT&T (T): Landline Drop Races Cellular Increase

AT&T (T) earnings were within the range of Wall St. forecasts. That is not saying much. The results were modest and pushed the stock up about 3%.

AT&T’s first quarter revenue totaled $30.6 billion, net income was $3.1 billion, and EPS came was $.53. Revenue dipped slightly from last year, and net fell 9% to $3.2 billion.

The company’s voice business, its traditional landline operation, was badly battered. Revenue dropped more than 12% to $8.5 billion.

Wireless services more than offset the plunge in voice sales, moving up 10% to $11.6 billion. Wireless data revenue was up 39% and the company activated 1.6 million Apple (AAPL) 3G iPhones in the quarter.

AT&T U-verse TV subscribers in service increased by 284,000 in the first quarter to reach 1.3 million in service. The company still has a long way to go to catch the subscriber counts at the big cable companies.

The really good news for the company is that its wireless customer base was up 10% to 78.2 million. The bad news is that consumer voice connections dropped 12% to 26.8 million.

It’s a horse race.

Douglas A. McIntyre