As the broader market rallies this morning, shares of AT&T
Ma Bell reported just 62,000 net new wireless handset customers in the first quarter. That's down 88% from 512,000 in last year's Q1, in the days before AT&T was forced to compete with Verizon
Does that sound bad? Well, it is. Apple's
The shortfall showed up in the financial statements. Overall wireless revenue rose 10.2%, but segment operating income fell 5.3% as margins declined from 30% in last year's Q1 to 25.8% in this year's first quarter. New devices based on Google's
Companywide, AT&T said revenue grew to 2% to $31.2 billion, while profits improved 39% to $0.57 per diluted share. Both figures matched analyst estimates.
Is that showing really so bad? I don't think so. Cash from operations funded virtually all of AT&T's $4.1 billion in capital spending, $1.3 billion in debt repayments, and $2.5 billion for dividends. Income investors can rest assured that the stock will continue to yield a remarkable 5.70%.
So while I get investors' concerns over competition and call quality, it's important to remember that more of us are getting our daily dose of cloud via devices connected to AT&T's network. And as the numbers show, with or without iPhone competition, the rise of this New New Thing (i.e., cloud computing) puts plenty of cash in Ma Bell's coffers.
Do you agree? Disagree? Tell us what you think about AT&T's results, network, and the company's forthcoming merger with T-Mobile using the comments box below. You can also rate AT&T in Motley Fool CAPS.
The Motley Fool recently introduced a free My Watchlist feature that allows users to stay ahead of the curve and receive up to date news on companies like AT&T, or any of its competitors. To get up-to-date AT&T news and analysis, add the company to your watchlist today: