Amid Time Warner Acquisition Talk, AT&T Reports Profit, Revenue Increases for Q3

AT&T reported $3.3 billion in profit for the third quarter of 2016 and a 4.6 percent increase in revenue from the year-ago quarter, mostly from its acquisition of DirecTV in summer 2015.

AT&T’s latest quarterly results were reported earlier than scheduled, and were overshadowed by news of the telco’s planned acquisition of Time Warner. Opponents are lining up to fight the $84.5 billion deal.

Third-quarter profit was up from $3 billion for the same quarter in 2015. Revenue for the latest quarter was nearly $41 billion, up from a little more than $39 billion for the year-ago quarter.

John Stephens, AT&T’s senior vice president and CFO, said earnings continue to grow and the integration of DirecTV “continues to generate the cost savings and sales opportunities we thought it would.”{ad}

“As we enter the home stretch of the year, we feel very good about our results and we look forward to finishing the year strong,” he said.

Wireless revenue was $18.2 billion, down slightly year over year, due to decreases in service and equipment revenues.

Third-quarter revenue from business customers was $17.8 billion, up slightly from a year ago. Growth in mobility and strategic business services offset declines in legacy services and a continuing low-growth economy.

Business wireless revenue was up 4 percent year over year, to almost $10 billion, driven by wireless service revenue growth and higher equipment revenue. Wireless service revenue was up a little more than 4 percent year over year, reflecting smartphone and tablet gains, and continued migration from consumer plans.

In business wireline, declines in legacy products were partially offset by continued growth in strategic business services. Total business wireline revenue was $7.8 billion, down nearly 4 percent year over year.

Revenue from strategic business services, including VPNs, Ethernet, cloud, hosting, IP conferencing, VoIP, MIS over Ethernet, U-verse and security services, grew by $242 million, or about 9 percent, compared to the year-ago quarter. These services represent an annualized revenue stream of more than $11 billion.

During the quarter, AT&T also added nearly 15,000 high-speed IP broadband business subscribers. Total business broadband had a loss of 18,000 subscribers in the quarter.

The telco ended the quarter with 79.4 million business wireless subscribers. It added 191,000 postpaid subscribers and 1.3 million connected devices during the quarter.

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