AT&T trims capex estimates for 2014 and 2015

AT&T Inc. (NYSE:T) said on Tuesday that it will spend about $2 billion less in capital expenditures (capex) in 2014 and 2015 than originally planned. While capex this year should meet the previous $21 billion expectation, the company now believes it will spend approximately $20 billion on capex in 2014 and 2015, rather than the $22 billion each year it had previously announced.

The company said the reductions will be the result of accelerating its 4G LTE rollout this year, improved integration efficiencies within its Project Velocity IP broadband rollouts (see "AT&T announces Project Velocity IP capex plans"), and “other ongoing initiatives.”

The announcement came as AT&T detailed a successful first quarter of 2013. “Our wireless network performance continues to be terrific,” said Randall Stephenson, AT&T chairman and CEO. “And that helped drive our best ever first quarter for smartphone sales, improved wireless churn, and strong growth in mobile data revenues. We also posted record sales of our U-verse high-speed IP service. Across all of these areas, we’ve built a solid foundation for future growth in mobile Internet and IP broadband, which will only expand as we progress with Project VIP.”

While consolidated revenues of $31.4 billion were 1.5% less than the same quarter of 2012, they were up 0.9% if one excludes income from the Advertising Solutions business unit it divested. Operating expenses of $25.4 billion were down $0.3 billion from the year-ago quarter, although operating income of $5.9 billion didn’t quite match the $6.1 billion of 1Q12. Nevertheless, net income attributable to AT&T came in a $3.7 billion ($0.67 per diluted share), better than last year’s $3.6 billion ($0.60 per diluted share).

On the wireline end of things, 1Q13 total revenue of $14.7 billion was down 1.8% from the same period last year -- but expenses of $13.0 billion were down 1.4% as well. This led to operating income of $1.6 billion, a reduction of 5.1% from the first quarter of 2012.

But that wasn’t the fault of the company’s broadband access efforts. U-verse revenues grew 31.5% year as total U-verse subscribers (TV and high-speed Internet) reached 8.7 million during the quarter. AT&T added 232,000 U-verse TV subscribers, its best net gain in nine quarters; 4.8 million customers now get the service. Meanwhile, the U-verse high-speed Internet service achieved its best-ever net gain, 731,000 subscribers, to reach a total of 8.4 million.

Overall, AT&T added 124,000 wireline broadband subscribers, its best quarterly increase in eight quarters.

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