AT&T on Tuesday reported net income of US$1.45 billion for the first quarter of 2006, a slight increase over the combined net incomes as reported a year ago by the old AT&T and SBC, the two companies that merged in November.
The old AT&T and SBC had a combined net income of $1.41 billion during the first quarter of 2005, and using those numbers, net income grew about 3 percent year over year.
But in its financial statement, the new AT&T compares its latest quarterly results to SBC’s numbers from the first quarter of 2005. Using that comparison, year-over-year net income rose more than 63 percent, from SBC’s $885 million. SBC acquired the old AT&T in a deal worth about $16 billion.
The company will hold an earnings conference later Tuesday to discuss results.
The new AT&T posted operating revenue of $15.84 billion during the first quarter of this year, which ended March 31. That’s an increase of nearly 55 percent from SBC’s reported revenue of $10.25 billion a year ago.
But the new AT&T’s revenue is down more than $1.4 billion, or about 9 percent, when compared to the combined revenue of SBC and the old AT&T, which reported revenue of $7 billion in the first quarter of 2005.
The new AT&T posted earnings per share of $0.52 this past quarter, while analysts polled by Thomson Financial expected earnings of $0.48 per share. Taking out merger-related costs, earnings per share were $0.37 this quarter.
This was a “strong quarter,” Ed Whitacre, AT&T chairman and chief executive officer, said in a press release. The new AT&T is on track to achieve merger-related cost-cutting goals of $600 million to $800 million this year, he said. In addition, he said, the company is moving ahead with its plan to acquire rival telecom carrier BellSouth, a move announced in March.
Among the quarterly highlights, AT&T reported:A 1.7 million net growth in subscribers at Cingular Wireless, the wireless carrier AT&T co-owns with BellSouth. Cingular now has 55.8 million subscribers, and Cingular’s revenue grew more than 9 percent to $9 billion.
IP data revenue, including DSL, dedicated Internet access and other services, increased 14 percent from the first quarter of 2005. An increase of 511,000 regional DSL connections, raising the number of lines in service to 7.4 million.
-Grant Gross, IDG News Service
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