AT&T reports Higher than Expected Profits
Telecommunications major AT&T on Wednesday reported a higher-than expected earnings. The company also stated that very few of its wireless customers switched to other networks at a rate that was not seen in any first quarter.
The telecommunication company that has been awaiting regulatory approval for its $48.5 billion proposal to buy DirecTV is expecting additional cost savings of more than double than its previous forecast from the deal.
AT&T also stated that it added nearly 441,000 postpaid or contract subscribers and almost 1.2 million new wireless customers in the quarter.
The average revenue per contract phone user fell 9.6% from a year earlier. On the other hand, shares of the company rose about 1.3% in after-hours trading. They shares closed at $32.86 on the New York Stock Exchange.
In the first quarter ended March 31, the US wireless carrier posted a net income of almost $3.2 billion, or 61 cents per share. The company in the previous year earned $3.65 billion, or 70 cents per share.
According to Thomson Reuters, excluding items, the company earned 63 cents per share, which was more than the expectations of the analysts. The analysts estimated 62 cents per share.
The company reported revenue of $32.58 billion as compared to $32.48 billion of a year earlier, which was below the analysts' revenue forecast of $32.84 billion.
Postpaid churn, or the rate of customer defections, fell slightly to 1.02% from 1.07% a year ago, the company said.
Wireless equipment revenue rose more than 36 % to $3.4 billion but service revenues fell 3.7 % to $14.8 billion.
The company is looking forward to merge Nextel Mexico with Iusacell, which the company acquired in November for $1.7 billion.