Telecommunications service provider AT&T posted a higher quarterly profit as revenue rose from growth in its wireless business and its purchase late last year of BellSouth.
First-quarter profit rose to $2.8 billion, or 45 cents a share, from $1.4 billion, or 37 cents a share, in the year-ago quarter, before it bought BellSouth. Total operating revenue rose to $28.97 billion from $15.76 billion, also excluding BellSouth in the year-ago quarter.
AT&T said adjusted earnings per share, excluding merger related costs and other items, were 65 cents compared with analyst estimates for 61 cents a share according to Reuters Estimates.
It said it was raising its estimate for a full year adjusted operating income margin to a 23% to 24% range, up from a 21% to 23% target announced in January.
While the company's wireless unit -- which is scrapping the Cingular Wireless name for the AT&T brand -- added fewer subscribers than some analysts had expected, AT&T said its wireless profit margin improved from a year ago.
Richard Lindner, AT&T’s chief financial officer, told CNBC that as wireless penetration continues, customer growth will slow. “But,” the CFO said, “what we’re seeing is (wireless) data revenue-growth accelerating –- and that’s what’s driving revenue per customer, and double-digit service revenues.”
Lindner said momentum in data will “absolutely” offset the slowing rate of growth in voice.
AT&T said its wireless unit added 1.2 million in the quarter compared with average estimates for 1.5 million from six analysts contacted by Reuters.