AT&T late Thursday raised its full-year earnings and cash flow guidance, after third-quarter revenue surged thanks to the contribution from newly-subsumed DirecTV.
In the three months to 30 September, the U.S. telco generated revenue of US$39.1 billion, up 19% year-o n-year. Operating income adjusted for amortisation, merger and integration, and other expenses surged to $7.9 billion from $5.9 billion in Q3 2014. Net income attributable to AT&T edged down to $2.99 billion from $3.13 billion.
Driven by these results, AT&T has raised its full-year adjusted earnings per share (EPS) guidance to $2.68-$2.74, from an earlier guidance of $2.62-$2.68. It now expects full-year free cash flow in the region of $15 billion or more, compared to its earlier forecast of $13 billion or more.
"We turned in outstanding financial results in the quarter. Our early integration efforts with DirecTV are going very well and we’ve just begun to scratch the surface on the video, wireless and broadband cross-selling opportunities," said AT&T CEO Randall Stephenson, in a statement.
However, AT&T’s new way of reporting mobile customers shows little growth in lucrative postpaid consumers.
The telco reported postpaid net additions of 23,000, down sharply from 240,000 in the third quarter of 2014. Prepaid additions came in at 466,000, driven by its Leap Wireless unit. The company ended September with 54.8 million consumer mobile customers, down from 56.1 million a year earlier.
The business division is where AT&T is seeing growth though. It added 265,000 postpaid customers, and 1.6 million connected devices, 1 million of which are connected cars.
Meanwhile, DirecTV brought in 26,000 new customers during the quarter; however, this was cancelled out by the loss of 92,000 U-verse TV customers, as AT&T switched its emphasis to selling satellite services.
Fixed broadband connections fell by 106,000 connections during the third quarter, as U-verse broadband additions of 172,000 were more than offset by the loss of 278,000 DSL subscribers. AT&T ended the quarter with 14.3 million fixed broadband customers, compared to 14.5 million a year earlier.
