AT&T Inc. (NYSE:T) reported that growth in mobile broadband and other wireless-related aspects of its business made the second quarter of 2011 the sixth consecutive quarter of year-on-year revenue growth. Things are going so well in wireless that the company expects to spend more in capex to keep up.
The company reported consolidated revenues for the quarter, which ended June 30, of $31.5 billion, up more than $680 million (2.2 percent) from 2Q10. Its operating income margin was 19.6 percent, just below last year’s 19.7 percent. Operating expenses were slightly higher year on year as well, $25.3 billion versus $24.7 billion, while operating income for the most recent quarter was $6.2 billion, up from $6.1 billion.
Second-quarter 2011 net income attributable to AT&T was $3.6 billion, or $0.60 per diluted share. These results compare with reported net income of $4.0 billion, or $0.67 per diluted share, in the second quarter of 2010. Earnings per share for the second quarter of 2011 matched earnings per share excluding the Telmex Internacional transaction in the year-ago second quarter.
"We delivered another strong quarter capping a solid first half of the year," said Randall Stephenson, AT&T chairman and chief executive officer. "Mobile broadband growth continues to be robust, and we are seeing encouraging signs in wireline revenues. This adds to our confidence as we look ahead."
Wireless was indeed the quarter’s star. AT&T saw a net gain in total wireless subscribers of 1.1 million, to reach 98.6 million in service. This led to total wireless revenues, including equipment sales, to climb 9.5 percent year over year to $15.6 billion. Wireless service revenues increased 7.4 percent, to $14.2 billion, in the quarter.
To take full advantage of the upward trend, AT&T announced that it would capital expenditures to approximately $20 billion this year. The company previously had predicted capex would run in the low-to-mid $19 billion range.
Meanwhile, AT&T reported that its wireline business held its own during the quarter, with sequential revenues “stable.” Driven by strength in IP data services, revenues from residential customers totaled $5.4 billion in the second quarter, an increase of 0.1 percent year on year. The narrow increase extended the number of consecutive quarters in which consumer revenues grew to four. An increase in U-verse subscribers and revenues drove the increase (see "U-verse adds can’t stop connection erosion, AT&T reveals").
AT&T's second-quarter wireline operating income margin was 13.1 percent, down slightly compared to 13.2 percent in the year-earlier quarter but up from 11.5 percent in the first quarter of 2011. Improved consumer and business IP data revenue and cost initiatives helped to partially offset declines in voice revenues, the company said.
Second-quarter total wireline revenues were $14.9 billion, down 3.2 percent versus the same quarter in 2010 and stable sequentially. Second-quarter wireline operating expenses were $13.0 billion, down 3.1 percent versus the second quarter of 2010 and down 1.8 percent sequentially. Wireline operating income totaled $2.0 billion, down versus the second quarter of 2010 and up from $1.7 billion in the first quarter of 2011.