AT&T report consolidated revenues for the second quarter of $33.0 billion, up 1.4 percent versus the year-earlier period. When excluding the divested Connecticut wireline property, revenues were up 2.2 percent. Compared with results for the second quarter of 2014, operating expenses were $27.3 billion versus $27.0 billion; operating income was $5.7 billion versus $5.6 billion in the second quarter a year ago, and operating income margin was 17.3 percent, up slightly from 17.2 percent in the year-ago quarter. Second-quarter 2015 net income attributable to AT&T totaled $3.0 billion, or $0.58 per diluted share, compared to net income of $3.5 billion, or $0.68 per diluted share in the year-ago quarter.
“These results reaffirm our transformation strategy,” said Randall Stephenson, AT&T chairman and CEO. “We grew revenues, expanded margins and delivered double-digit adjusted EPS and cash flow growth. We added more than 2 million new wireless subscribers as the repositioning of our smartphone base nears completion. We also began expanding high-quality, high-speed wireless service to Mexican consumers and businesses. This is a pivotal time for us. We look forward to closing DIRECTV and building on this momentum by delivering a new TV everywhere experience integrated with mobile and high-speed Internet service.”
Wireless Highlights:
- 2.1 million net adds including 410,000 postpaid, 331,000 prepaid and 1 million connected cars
- About 1.2 million branded (postpaid and prepaid) smartphones added to base
- Positive branded phone net adds
- Strong churn levels with continued low wireless postpaid churn of 1.01 percent and total churn of 1.31 percent
- At the end of the quarter, 85 percent, or 57.5 million, of AT&T’s postpaid phone subscribers had smartphones.
- Smartphones accounted for about 94 percent of phone sales during the quarter.
- AT&T’s ARPU for smartphones is about twice that of non-smartphone subscribers.
- At the end of the second quarter, 83 percent of AT&T’s postpaid smartphone customers had an LTE capable device.
Wireline Highlights:
- Strategic business services revenues of $2.7 billion, up 13.0 percent and up 13.6 percent when adjusted for the Connecticut wireline sale; now one-third of total wireline business revenues
- U-verse consumer revenues of $4.1 billion with adjusted growth of 19.2 percent year over year
- Advanced business solutions — including VPNs, Ethernet, cloud, hosting, IP conferencing, voice over IP, MIS over Ethernet, U-verse and security services — represent an annualized revenue stream of nearly $11 billion and were one-third of wireline business revenues in the second quarter
International Highlights
- Completion of Nextel Mexico acquisition
- Integration with Iusacell underway
- Established plans to own and operate 4G LTE network in Mexico with plans to cover 100 million POPs with a calling plan footprint of 400 million POPs across North America
