AT&T Profits and Loss Provision Rise, Churn Rate Down

AT&T Inc. (NYSE: T) today announced strong third-quarter results and delivered its tenth consecutive quarter of double-digit growth in adjusted earnings per share that were in line with analysts’ estimates.

The company reported gains in customers across its different business lines. However, along with that growth came a large increase in the provision for uncollectible accounts – rising to $1.14 billion, up from $450 million a year earlier. The current figures include results from the former BellSouth Corp., which was acquired Dec. 30, 2006.

“Wireless subscriber gains stepped up dramatically,” said Randall Stephenson, AT&T chairman and chief executive officer, in a prepared statement. “Our enterprise business has greatly improved momentum. Broadband growth is solid. And our AT&T U-verse TV install rate already approaches our year-end target of 10,000 per week.”

Company officials forecast strong results for the near future.

AT&T reported third-quarter revenues of $30.1 billion, up from $15.6 billion in the year-earlier quarter, prior to its acquisition of BellSouth and the accompanying consolidation of wireless results.

The company’s reported net income for the third quarter totaled $3.1 billion compared with $2.2 billion in the year-earlier quarter. Reported earnings per diluted share totaled 50 cents versus 56 cents in the third quarter of 2006.

AT&T gained 2 million wireless subscribers, the highest third-quarter subscriber increase in the company’s history, minimizing customer churn issues that are rampant among wireless carries. Overall average monthly subscriber churn was 1.7 percent, down 10 basis points versus the year-earlier third quarter, and postpaid churn was 1.3 percent, down 20 basis points from the third quarter of 2006. Sequentially, versus second-quarter 2007 results, churn levels were up slightly, reflecting typical third-quarter seasonality.

In the third quarter, AT&T’s wireless operations boosted subscriber additions and delivered strong growth in revenues and operating income, which the company said reflected the company’s broad network coverage, attractive handset selection and quality customer care. One of the key factors in that growth was the popular Apple iPhone, for which AT&T has a five-year, exclusive deal.

AT&T is the United States’ wireless leader with 65.7 million subscribers, operates the nation’s largest wireless digital voice and data network, and through roaming alliances around the world provides the largest global presence among U.S. wireless carriers.