AT&T Q2 Net Up; CFO Expects Improvement in Wireline
AT&T’s Q2 net income rose 26 percent year-over-year to $4 billion, helped by wireless growth and its cost cutting initiatives. Chief Financial Officer Rick Lindner expects improved results from consumer landline services but a slow recovery of business services, he said during a conference call Thursday.
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The company signed up a net 496,000 new wireless contract customers, down slightly from the 512,000 it signed in Q1. AT&T also added 300,000 prepaid customers, more than it has in any quarter since 2007. The carrier activated 3.2 million iPhones and 400,000 to 500,000 iPad 3Gs in the quarter, Lindner said. The carrier recently ended its unlimited data plans with capped monthly plans. “While it’s still early, we're pleased with the initial results on the new data plan, and they're in line with our expectations,” Lindner said.
The carrier continues to look for potential transactions overseas, especially in emerging markets, Lindner said. But the company hasn’t found any opportunities, he said. If it was to sign a deal, it would prefer a controlling stake, he added. He cited AT&T’s stake in America Movile as an example of expanding AT&T’s presence in emerging markets.
Most of the iPad 3G customers have gravitated to the higher tier data plan, with many still sticking to the option of an unlimited data service, Lindner said. The usage has been in line with expectations, he said, saying it’s lower than a laptop wireless card but above the normal iPhone use. It’s surprising how many business customers are approaching AT&T about the iPad, Lindner said. Many companies have iPad trials going on and many see opportunities to use the iPad as a laptop replacement, he said.
The carrier lost 92,000 total broadband customers but added 209,000 new U-Verse TV subscribers during the quarter. In total, AT&T now has 2.5 million U-Verse subscribers, a 60 percent increase from 2009. BTIG analyst Walt Piecyk said investors saw the positive outlook as a sign of improvements in the overall economy. The carrier has cut more than 10,000 jobs this year, ending the quarter with 272,450 employees.