AT&T barely missed the Street’s Q4 sales and EPS estimates, but the company’s key growth areas — wireless and digital TV — look OK.
Overall, AT&T reported adjusted EPS of $0.64 on $31.1 billion of revenue. That’s slightly below consensus of $0.65 adjusted EPS on $31.35 bilion of revenue.
AT&T expects sales to grow in the low single digits in 2009; that’s about in line with the Street’s expectations of 1.3% revenue growth. But EPS outlook is “well below expectations,” Goldman Sachs analyst Jason Armstrong says in a note today. (AT&T is changing how it will provide earnings guidance. See notes in release.)
- Wireless growth decelerated, but still good. AT&T added 2.1 million net wireless subscribers, down from 2.7 million during Q4 2007. But last year’s growth was the best by any carrier ever — not sustainable, especially in this econony. Either way, AT&T soundly beat archrival Verizon, which added 1.2 million net subscribers during Q4. And more important, “postpaid” subscriber signups — who sign long-term contracts — increased 14% to 1.3 million.
- iPhone sales more than doubled. AT&T activated 1.9 million iPhones during Q4. That’s more than twice last Christmas’s activations. Good news because iPhone subscribers spend 1.6x more per month on wireless service.
- U-Verse digital TV growth accelerated. AT&T signed up 264,000 new U-Verse TV subscribers, its highest ever. Combined with Verizon’s 303,000 new FiOS subscribers, it seems like the telcos took solid share from cable and satellite last quarter.
We’ll tune into AT&T’s earnings call at 10 a.m. ET and update with any relevant information.