AT&T has just given its first quarter report and it seems that things are looking good for the US carrier.. The strong revenues, growth in its postpaid smartphone sales, and its acquisition of Leap Wireless has made it raise its full-year 2014 outlook to 4 percent or greater.
By the end of March 2014, AT&T has amassed $32.5 billion in consolidated revenue. Compared to the same period last year, the figures increased by 3.6 percent. Broken down, operating expenses were $26.2 billion and operating income was $6.3 billion. According to AT&T, this is the best figures in two years. Its acquisition of Leap Wireless, which closed in the middle of March, barely had any impact on the first quarter numbers. However, AT&T is expecting that the full impact will be experienced over the next two years, with integration costs reaching up to $1.2 billion.
One of the biggest areas of growth for AT&T was in smartphone sales, particularly under postpaid plans. As much as 1.1 million postpaid smartphones were added last quarter, consisting 92 percent of the postpaid phone sales during that period. The Average Revenue Per User or ARPU for smarpthones are actually twice as much as that of non-smartphone postpaid contracts. 57 percent of those smartphones sold are LTE-capable, attesting to the growing demand for LTE connections and speeds. On the other end of the spectrum, AT&T reported losing 50,000 prepaid subscribers, blamed on the low number of session based tablets. Its acquisition of Leap Wireless might help to offset that loss in the near future.
Due to the strong first quarter, AT&T is revising its full year outlook with a more positive spin. It is expecting that consolidated revenue will end up at around 4 percent or greater compared to last year. It has also adjusted consolidated margins and earnings per share (EPS) to take into account for the addition of Leap Wireless in the business. It does expect to end up with something along $11 billion of free cash flow, thanks to AT&T Next and Leap Wireless.