AT&T Q1 consumer wireline revenues rise 2% to $5.5 billion on strong U-verse gains
AT&T's (NYSE: T) U-verse IP-based broadband and U-verse additions helped drive first quarter 2013 consumer wireline revenues up 2 percent to $5.5 billion, while offsetting business customer revenue declines.
Click here for charts outlining AT&T's Q1 2013 earnings report.
During the quarter, total U-verse revenues grew 30.8 percent year over year and 4.9 percent sequentially. U-verse revenues now represent 48 percent of wireline consumer revenues, up from 38 percent in Q1 2012 and 27 percent in 2011.
Overall Q1 2013 wireline revenues declined 1.8 percent to $14.7 billion, down 1.8 percent year-over-year and 1.8 percent sequentially. Wireline operating income was $1.6 billion, down 5.1 percent from Q1 2012.
Here's a breakdown of the telco's key metrics:
Landline losses: Typical of every quarter, AT&T's landline voice subscriber base declined 11.5 percent sequentially to 31.1 million from 35.2 million in Q4 2012 as more consumers ditched their landline phones for either a triple play bundle or went completely wireless for voice service.
Broadband and video: Overall U-verse revenues rose 31.5 percent year-over-year and 5 percent sequentially. It added 232,000 U-verse TV subscribers, ending the quarter with a total of 4.8 million customers in service. Likewise, AT&T added 731,000 new U-verse broadband users in the quarter to reach a total of 8.4 million. U-verse broadband subscribers now represent over half of its wireline broadband subscriber base. In total, AT&T added 124,000 wireline broadband subscribers, which it said was "the best quarterly increase in eight quarters." Broadband APRU rose over 9 percent year over year to $40.
The current U-verse growth will be complemented with U-verse upgrades as part of its Project VIP initiative.
"Our U-verse VIP deployments will begin rolling out later this year, but the incredible first quarter U-verse results add to our confidence in making this a larger part of our growth strategy," said John Stephens, AT&T's Chief Financial Officer, during the earnings call. "We continue to gain market share in areas where we offer U-verse and Project VIP expands those areas even more."
Business services: Economic uncertainty coupled with slow government spending drove business revenues down 3.4 percent and business services revenues 3.5 percent year-over-year. One factor that helped partially offset the business services unit's losses was the growth of strategic business services such as VPN, Ethernet, hosting and other advanced IP services. Even in what is a difficult economic environment, strategic business services, which represent a $7.9 billion annualized revenue stream, grew 10.8 percent over Q1 2012.
Still, the economy continues to have an effect on AT&T Business Services.
"Uncertainty with the economy continues to be the issue," Stephens said. "Customers are delaying buying decisions, unemployment continues to lag, the business overhang from regulatory uncertainty persists, and government budget issues are all having an impact on our customers and our results."
Despite the state of the economy, Stephens said that they are "seeing growing demand for high speed connectivity and our data services," which it will address with the Fiber to the Business (FTTB) segment of Project VIP.
From an overall financial point of view, AT&T's consolidated revenues totaled $31.4 billion, down 1.5 percent year-over-year and up 0.9 percent when excluding revenues from the Advertising Solutions business unit, which it divested last year.
AT&T shares were listed at $38.20, down 0.80, or 2.05 percent, in after-hours trading on Tuesday on the New York Stock Exchange.
Earnings roundup: Wireline telecom earnings in the first quarter of 2013