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AT&T revenue, subscriber growth beats estimates

AT&T revenue, subscriber growth beats estimates

AT&T Inc’s fourth-quarter revenue rose faster than expected and the telephone company promised more growth this year even if the economy does not improve.

Along with growth from its existing business, Chief Executive Randall Stephenson said on Thursday that AT&T is also eyeing overseas opportunities. He said the idea would be to profit from wireless expansion in countries where services are not yet as advanced as in the United States.

“The question is if there are opportunities for us to participate in that growth around the world” Stephenson said on a conference all with analysts. “There’s just a lot of different ways to think about it. There’s a lot of options.”

Stephenson declined to say if it could involve overseas acquisitions in response to a question about a recent report that it was considering overseas transactions. Instead, he listed options such as international roaming deals for AT&T customers traveling overseas and the possibility for overseas expansion of a home security business AT&T is developing.

AT&T, the No. 2 U.S. mobile service provider, posted stronger than expected fourth quarter subscriber growth but this also put pressure on its wireless profit margin as it spends heavily on every new subscriber it signs up.

It added 780,000 mobile subscribers in the quarter compared with the average expectation for 699,200 from 10 analysts, with the lowest estimate at 475,000 and the majority of estimates at 700,000 or higher.

While the company’s sale of 8.6 million Apple Inc iPhones in the quarter helped subscriber numbers it hurt profits as AT&T pays Apple a big subsidy for every iPhone it sells so it can offer discounts to customers who commit to contracts.

AT&T’s wireless service profit margin based on earnings before interest, tax, depreciation and amortization was 29.1 percent, compared with the average expectation for 31.29 percent from ten analysts contacted by Reuters.

Stephenson said he would keep a close watch on a strategy outlined by smaller rival T-Mobile USA to offer smartphone installment plans under which consumers would pay for their smartphones gradually. If it followed this plan it would mean that AT&T would not have to pay a big upfront subsidy.

“That’s something we’ve looked at on several occasions. I kind of like that idea,” Stephenson said. “Its something we’re going to be watching.”