AT&T (T) saw its quarterly revenue increase and raised its outlook, but its Q1 net income fell 1.2% with rising expenses.
The company’s 70 cent earnings per diluted share beat analysts’ estimates by one cent.
“We have been working very deliberately to transform our business, and this quarter you really start to see the benefits,” said AT&T chairman and CEO Randall Stephenson in a statement. Customers “are choosing to move off device subsidies to simpler pricing while at the same time, they are continuing to move to smartphones with larger data plans.”
T stock is down 3.3% pre-market.
Via USA Today:
Revenue for the wireless unit, which runs the nation’s second largest wireless carrier, grew 7% year-over-year to $17.9 billion as it added more than 1 million subscribers. About 625,000 new customers signed up for postpaid plans — contract-based wireless voice-data plans that are considered the most profitable in the industry — during the quarter.
Nearly 80% of AT&T’s postpaid phone subscribers had smartphones, which generate higher revenue per customer. A year ago, 72% had smartphones.
In its statement, AT&T said “this was the strongest first-quarter postpaid growth in five years,” in part thanks to T moving toward family data-sharing plans. The plans are about 45% of postpaid subscribers.
The company also raised its outlook, noting that it expects revenue growth of at least 4%, up from a previously expected 2%.
T-stock is down 5% from this time last year.