AT&T Dramatically Changes Revenue Source Profile

On an annualized basis, AT&T will earn about 46 percent of its revenue from business sources and about 54 percent from consumer services. That is a big change from the prior year, when AT&T earned about 54 percent of revenue from its business solutions category.

The perhaps-shocking change is that AT&T, on an annualized basis, will earn just 22 percent of revenue from consumer mobile services, making AT&T almost a mirror image of Verizon, which earns about 85 percent of total revenue from mobile services.

Altogether, about 41 percent of AT&T’s total revenue is earned from mobility services.

In the quarter, AT&T earned about 45 percent of total revenue from business solutions, 28 percent from entertainment and Internet services and 24 percent from consumer mobility. About 38 percent of business solutions revenue was generated by business customer mobile services.

Beyond that, AT&T reported double-digit revenue, adjusted operating margin, adjusted earnings per share and free cash flow growth in the third quarter of 2015.

Third-quarter consolidated revenues of $39.1 billion were up nearly 19 percent year over year,  primarily due to the acquisition of DirecTV.

Business Solutions revenues up 1.2 percent, year over year, with strategic business services revenues of $2.8 billion, up 12.6 percent and up 15.2 percent, when adjusted for foreign exchange

Operationally, AT&T gained 26,000 domestic DirecTV net adds, 192,000 IP broadband net adds
and 2.5 million AT&T Mobility domestic mobile account net adds.

Of those mobile net adds, 755,000 were branded phone accounts, including 289,000 postpaid and 466,000 prepaid net accounts.

AT&T also added 1.6 million connected device accounts, including one million connected cars.

Total churn was 1.33 percent, down year over year, while postpaid churn was 1.16 percent.

The company also is increasing its adjusted EPS and free cash flow outlook for the year. For the full year, AT&T now expects adjusted EPS in the $2.68 to $2.74 range and free cash flow in the $15 billion range or better.
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