AT&T 1Q Net Down 21% On Charge; Subscribership Growth Jumps

21st Apr 2010 12:48

DOW JONES NEWSWIRES AT&T Inc.'s (T) first-quarter earnings fell 21% on a $995 million charge related to the new federal health-care law, as the company's revenue increased slightly and it continued to add wireless subscribers. Earnings beat expectations, with Chairman and Chief Executive Randall Stephenson saying, "We're off to a great start to the year, and our fundamental outlook for the business continues to be quite positive," AT&T added 1.9 million new wireless subscribers in the quarter, the biggest first-quarter gain in the company's history, up from 1.2 million a year earlier. Shares were up 0.2% to $26.70 premarket. As of Tuesday's close, the stock had risen 5.5% in the past year. The wireless giant - the second-biggest carrier in the country to Verizon Communications Inc. (VZ) and Vodafone PLC's (VOD, VOD.LN) Verizon Wireless - has continued to capitalize on its exclusive agreement with Apple Inc. (AAPL) to provide service for its wildly popular iPhone. But it has been reported that a new version of the iPhone that would operate on Verizon's network is in the works, and rumors continue to swirl that AT&T's exclusivity contract with Apple may expire soon, setting up a battle for iPhone users. AT&T reported a profit of $2.48 billion, or 42 cents a share, down from $3.13 billion, or 53 cents, a year earlier. The most-recent quarter included a 17-cent charge related to tax treatment for a Medicare subsidy, while the year-earlier quarter included 5 cents of pension and retiree benefit expenses. Revenue increased 0.3% to $30.65 billion. Analysts polled by Thomson Reuters had most recently forecast earnings of 54 cents on $30.73 billion in revenue. The company's wireless service saw revenue increase 10%, while wireline voice revenue dropped 12%. Total wireless churn, or customers who cancel service, was 1.3%, down from 1.56% a year earlier. -By Nathan Becker, Dow Jones Newswires; 212-416-2855; [email protected]; (END) Dow Jones Newswires April 21, 2010 07:48 ET (11:48 GMT)