Buoyed by ongoing gains in IP-based consumer and business services AT&T (NYSE: T) reported on Thursday that revenues increased 2.1 percent to $31.4 billion, up $643 million from the same period a year ago.
AT&T's Q4 2010 earnings were $1.1 billion, or 18 cents per share. While that's down from 2009's fourth quarter earnings of $2.7 billion, or 46 cents per share, it includes a one-time charge of 26 cents per share from its previously disclosed pension accounting change.
AT&T's fellow RBOC Verizon (NYSE: VZ) reported that it also saw gains in both its consumer and business segments with increases in its Fiber to the Premises (FTTP)-based FiOS service and IP-based Ethernet services gaining momentum during the fourth quarter. Like AT&T, Verizon also had to deal with a change in its pension reporting in addition to adjustments from its sale of its rural lines to Frontier Communications.
Here's a breakdown of the other AT&T wireline segment metrics:
- Consumer wireline: Similar to Q3 2010, the rising star in AT&T's consumer portfolio was the ongoing adoption of its consumer IP-based U-verse video and data services. With U-verse as its wireline consumer star, IP revenues now represent 45 percent of AT&T's consumer wireline revenues, up from 35.3 percent a year ago. During the quarter, AT&T added 246,000 subscribers to reach a total of about 3 million, while U-verse broadband attach rates continued to run above 90 percent, and 60 percent of subscribers took AT&T U-verse Voice.
- Landline loss: As expected, AT&T's overall consumer wireline revenue was down due to ongoing declines in traditional POTS lines. Although reported that it added 186,000 AT&T U-verse Voice connections during the quarter, total consumer voice revenue connections at the end of Q4 were 43.4 million, compared with 45.3 million at the end of the fourth quarter of 2009 and 43.7 million at the end of the third quarter of 2010.
- Business services: Like the consumer segment, the star performer in AT&T's business services unit was IP-based services. Strategic service business revenues, a category that includes including Ethernet, VPNs, hosting, IP conferencing and application services, grew 17.1 percent over Q4 2009 and were up 5.5 percent from Q3 2010. Overall, business revenues did decline 4.5 percent to $9.4 billion from Q4 2009, a factor it attributes to economic weakness in voice and legacy data products, and the third-quarter sale of the company's Japan assets. However, the growth of VPN revenues drove AT&T's total business IP data revenues up 9 percent over Q4 2009 and Global Enterprise Solutions IP data revenues grew 11 percent. One factor that's driving the continual growth of IP-based business services is the fact that over 70 percent of AT&T's Frame Relay customers have transitioned to IP-based solutions to gain access to new managed services such as network security, cloud services and IP conferencing.
Looking forward to Q1 2011, AT&T expects earnings per share growth in the mid-single-digit percentage range, a fact that was lower than what analysts had initially expected.
- see the release
- here's FierceIPTV's take
- Reuters has this article
Wireline in the fourth quarter 2010
AT&T: Broadband, IP-based business services rose to the occasion in Q3
AT&T's Lindner: IP services drive consumer, business wireline growth