Feature Article

October 22, 2014

AT&T Q3 2014 Results Up 2.5 Percent, Mobile Up 5 Percent

In a quarter with a lot of moving parts (a shift in the way AT&T accounts for device sales, Leap Wireless and Alltel revenue and costs), AT&T reported third quarter 2014 revenues up 2.5 percent versus the year-earlier period.

Total mobile segment revenues, which include equipment sales, were up 4.9 percent year over year to $18.3 billion.

Total third quarter fixed segment revenues were $14.6 billion, down 0.4 percent versus the year-earlier quarter and down slightly versus the second quarter of 2014.

Wireless service revenues were essentially flat in the third quarter at $15.4 billion, and wireless equipment revenues increased 44.3 percent to $2.9 billion as more customers chose equipment installment plans versus subsidized devices.

Third quarter wireless operating expenses totaled $13.8 billion, up 7.5 percent versus the same quarter a year earlier due to higher equipment costs, network systems expenses and marketing costs, largely attributable to the company’s acquisition of Leap Wireless, and wireless operating income was $4.5 billion, down 2.3 percent year over year. Third quarter 2014 revenue comparisons included impacts from strong customer adoption of Mobile Share Value plans and promotional activities, partially offset by increased revenues from Leap.

Revenues from residential customers totaled $5.7 billion, an increase of 3 percent compared to the third quarter a year ago.

U-verse, which includes high speed Internet, TV and voice over IP (VoIP), now represents 64 percent of fixed segment consumer revenues, up from 54 percent in the year-earlier quarter. Consumer U-verse revenues grew 23.2 percent year over year.

As was the case at Verizon, total revenues from business customers declined. At AT&T, business customer revenues were $8.7 billion, down two percent year over year and stable sequentially.

As was the case for Verizon Communications, declines in business customer legacy products were partially offset by continued double-digit growth in strategic business services (VPNs, Ethernet, cloud, hosting, IP conferencing, VoIP, MIS over Ethernet, U-verse and security services).

Strategic business services grew 14.3 percent versus the year-earlier quarter.

The bottom line includes continued revenue growth overall, with gains lead by the mobile segment, and by consumer services within the fixed network segment, as also was the case at Verizon in the third quarter.

Edited by Alisen Downey

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