AT&T Profits Up - Expects Stable Year Ahead

AT&T has reported that its full year net income for 2008 rose by 7.7% to US$12.9 billion - on revenues of US$124 billion, which were in turn up 4.3% on a year ago.

AT&T's 2008 consolidated revenues were up 3.4 percent versus 2007 revenues adjusted for directory accounting effects. Compared with 2007 full-year adjusted results, 2008 adjusted operating expenses were $95.4 billion, compared with $91.3 billion; adjusted net income was $16.7 billion versus $17.0 billion.

However, net income in the fourth quarter fell to US$2.4 billion, from US$3.14 billion. 

"Despite the economic environment, we grew revenues in 2008, and I expect 2009 will be another year of overall revenue growth and solid progress for our company," said Randall Stephenson, AT&T chairman and chief executive officer.

"During the past year, we took major steps to improve AT&T's position for 2009 and beyond. The success of our iPhone 3G launch has driven wireless growth and helped redefine the wireless data space,"

The firm also reported that it added 2.1 million net subscribers in the fourth quarter - to end the year with 77 million customers. There were 4.3 million iPhone 3G devices activated in the second half of 2008, including 1.9 million in the fourth quarter. Approximately 40 percent of iPhone activations were for customers new to AT&T.

Wireless postpaid subscriber ARPU growth of 3.9 percent versus the year-earlier quarter to $59.59; postpaid data ARPU up 35.7 percent versus the fourth quarter of 2007 and up 10.9 percent sequentially.

AT&T reported a 51.2 percent growth in wireless data revenues - reflecting rapid adoption of wireless integrated devices and increased usage of wireless Internet access, messaging and related services; AT&T's wireless integrated devices in service more than doubled over the past year

Looking ahead to the rest of the year, the company said that it expects a significant increase in wireless margins as the iPhone 3G customer base matures, with continued revenue growth. AT&T expects to achieve wireless service OIBDA margins in the low 40 percent range by the end of 2009, with a longer-term expectation of reaching the mid 40 percent range.

Posted to the site on 28th January 2009