Third-quarter profit was $4.7 billion compared to $3 billion for the year-ago quarter. Consolidated revenue totaled $45.7 billion compared to $39.7 billion, slightly beating analyst expectations. Declines in domestic video, legacy wireline services and Vrio, AT&T’s DirecTV business in Latin America, were offset by growth in wireless equipment and services, WarnerMedia and Xandr, its new advertising company.
“Our U.S. wireless business is growing and it’s the single biggest contributor to our earnings and cash flow,” said Randall Stephenson, AT&T’s chairman and CEO. “WarnerMedia was immediately accretive in its first full quarter, contributing 5 cents to earnings per share, and our free cash flow grew by double digits. We’ve accomplished all this while staying focused on managing our debt portfolio. And as we’re nearing completion of our fiber build and making pricing moves on video, we’re laying the foundation for stabilizing our entertainment group profitability in 2019. Across the business, I like our momentum and feel confident that we’re on track to deliver on our plans.”
For the third quarter, AT&T’s wireless revenue was $18 billion, up more than 3 percent year over year due to an increase in equipment revenue. Wireless service revenue was $14 billion, down more than 3 percent due to accounting changes, or up a little more than 2 percent on a comparable basis, due to subscriber gains and pricing actions.
The telco reported a record net increase in total wireless subscribers of 3.4 million, to reach 150.3 million in service.
Third-quarter revenue from business customers was close to $9.2 billion, down 5 percent. Business wireless service revenue was less than $1.9 billion, down 7 percent.
Business wireline revenue totaled $6.7 billion, down 8 percent year over year. Third-quarter revenue included about $80 million from the sale of intellectual property assets.
Revenue from strategic business services, including VPNs, Ethernet, cloud, hosting, IP conferencing, voice over IP, MIS over Ethernet, U-verse and security services, grew by $44 million compared to the same quarter a year ago. These services represent an annualized revenue stream of more than $12 billion.
During the quarter, business wireline gained 5,000 high-speed IP broadband business subscribers. Total business broadband subscribers were down 11,000.
AT&T added 570,000 prepaid subscribers, which included 481,000 prepaid phone subscribers, the second highest in more than 10 years. It also added 3.5 million connected devices in the quarter and lost 434,000 reseller subscribers.