8-KOther EventsExhibits & Filings

AT&T INC. 8-K Report, Corporate Update (Apr 23, 2014)

Filed April 23, 2014For Securities:TT-PCTBBT-PA

Summary

AT&T Inc. reported first-quarter 2014 financial and operational results, showing modest growth in key areas. Net income attributable to AT&T remained steady at $3.7 billion, though earnings per share increased slightly to $0.70 from $0.67 in the prior year quarter. Total revenues grew by 3.6% to $32.5 billion, driven by strong performance in the wireless segment, particularly from device sales under the AT&T Next program and increased wireless service revenues. Growth was also seen in AT&T U-verse and strategic business services, which helped offset declines in legacy voice and data products. The company highlighted the successful acquisition of Leap Wireless International for approximately $1.2 billion, completed in March 2014. While Leap's results did not have a material impact on the first quarter, its subscribers were integrated into AT&T's base. Wireless segment revenues saw a significant 7.0% increase, bolstered by AT&T Next sales and a substantial net gain of over 1 million wireless subscribers, bringing the total customer base to 116 million. This growth was achieved despite a slight increase in postpaid churn and a decrease in average revenue per postpaid subscriber, which the company attributes to the adoption of AT&T Next and Mobile Share plans. The wireline segment experienced a slight revenue decrease, primarily due to ongoing declines in legacy services, though IP-based broadband and video revenues showed growth.

Key Highlights

  • 1First-quarter 2014 net income attributable to AT&T was $3.7 billion, or $0.70 per share, compared to $3.7 billion, or $0.67 per share, in Q1 2013.
  • 2Total revenues increased 3.6% to $32.5 billion, driven by wireless and strategic business services growth, offsetting legacy product declines.
  • 3AT&T acquired Leap Wireless International for approximately $1.2 billion cash in March 2014, adding its subscribers to AT&T's base.
  • 4Wireless segment revenues grew 7.0% to $17.9 billion, with significant contributions from AT&T Next device installment plans and increased service revenues.
  • 5Total wireless subscribers reached approximately 116.0 million at March 31, 2014, an increase of 890,000 from the previous year, including 1.062 million net adds in Q1.
  • 6More than 40% of postpaid smartphone gross adds and upgrades adopted the AT&T Next installment plan in Q1 2014.
  • 7Wireline revenues saw a slight decrease of 0.4% to $14.6 billion, with growth in IP-based broadband and video offsetting declines in legacy services.

Frequently Asked Questions

AT&T reported stable net income of $3.7 billion for Q1 2014, with earnings per share rising to $0.70 from $0.67 in Q1 2013. Total revenues grew 3.6% to $32.5 billion, primarily due to strong wireless segment performance and growth in U-verse and business services.

AT&T acquired Leap Wireless International for approximately $1.2 billion in March 2014. While Leap's operating results did not significantly impact Q1 2014 results, its subscribers were integrated into AT&T's customer base, contributing to the overall wireless subscriber growth.

The AT&T Next equipment installment plan significantly boosted wireless device sales, with over 40% of postpaid smartphone gross adds and upgrades adopting the program in Q1 2014. This contributed to increased wireless service revenues and revenue from device sales, helping to offset pressures from customer growth and upgrades.

AT&T experienced robust wireless subscriber growth, adding 1.062 million net new subscribers in the first quarter of 2014. This brought the total wireless customer base to approximately 116 million at the end of the quarter, up from 107.3 million a year prior. Postpaid smartphone net adds were 311,000, and total branded smartphone net adds (postpaid and prepaid) were 566,000.