AT&T posted third-quarter 2006 net income of $2.2 billion, up 73.8 percent versus $1.2 billion in the third quarter of 2005. Third-quarter consolidated revenues totaled $15.6 billion, up from a pre-merger $10.3 billion in the third quarter of 2005.
AT&T's reported earnings per diluted share were $0.56, up 47.4 percent versus the year-earlier third quarter. Before merger-related costs, earnings per diluted share were $0.63, up 34.0 percent versus comparable adjusted results in the third quarter of 2005. This marked AT&T's sixth consecutive quarter of double-digit growth in earnings per share before merger-related costs.
Some highlights:
- High speed Internet connections -- which include DSL, AT&T U-verse and satellite services -- increased by 380,000 in the third quarter to 8.2 million, up 1.7 million or 25.5 percent over the past year. Approximately 90 percent of AT&T's high speed Internet net adds in the third quarter were consumer.
- 42% of DSL line base on speeds higher than 1.5 Mbps -- up from 22% a year earlier.
- Primary consumer lines declined by 242,000 in the third quarter, compared with declines of 320,000 in the second quarter of this year and 114,000 in the third quarter of 2005. Additional lines declined by 109,000 in the third quarter, consistent with results over the past several quarters, reflecting in part migration from dial-up Internet access to high speed service.
- Video connections, AT&T | DISH Network satellite television plus AT&T U-verse service, increased by 53,000 to reach 586,000 in service.
- Total wireline revenues in the third quarter were $14.6 billion, up 58.0 percent versus a pre-merger $9.2 billion reported in the third quarter of 2005 and down 0.8 percent versus the second quarter of 2006.
- Versus pro forma results for the year-earlier quarter, AT&T's third- quarter 2006 wireline revenues declined 4.9 percent, compared with a 5.1 percent decline in the second quarter of this year. More than 60 percent of the year-over-year decline came from the former AT&T Corp. national mass markets category, primarily stand-alone long distance and local bundled services, where AT&T Corp. discontinued proactive marketing in 2004. Beyond this category, third-quarter wireline revenues declined 2.2 percent, largely reflecting declines in enterprise as well as in wholesale, where, as expected, recent shifts of traffic by major consolidated carriers to their own networks affected comparisons.
- Regional business voice revenues grew 6.6 percent, revenues from IP-based data services increased more than 20.0 percent and total data revenues grew 12.0 percent.
- Enterprise revenues totaled $4.4 billion in the quarter, representing a decline of 5.1 percent versus pro forma results for the year-earlier period due to continued competition in the marketplace. This followed year-over-year declines of 7.3 percent in the second quarter of this year and 6.8 percent in the quarter before that. Enterprise revenues declined 0.5 percent sequentially in the third quarter after a 0.2 percent sequential decline in the preceding quarter.
- Regional consumer revenues totaled $3.7 billion in the third quarter, up 0.7 percent versus pro forma results for the third quarter of 2005, reflecting a 376,000 increase in consumer connections over the past year to 33.1 million.
- AT&T expects to launch its U-verse services in approximately 15 markets (metropolitan statistical areas) across its traditional 13-state wireline area by the end of 2006, all including HDTV.
