AT&T U-verse Sub Growth Also Slows In Q3

But Total U-verse Revenues Surge 23.8%
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AT&T, offering a similar picture to what Verizon FiOS painted on Tuesday, saw its U-verse customer base rise in the third quarter of 2014, though at a slower rate on a year-over-year basis.

AT&T added 216,000 U-verse TV subs in the third quarter of 2014, off from the 265,000 added in the year-ago period. AT&T finished the quarter with 6.1 million U-verse TV subs, with more than 97% taking a service bundle.

AT&T also tacked on 601,000 U-verse high-speed Internet customers in the third quarter, down from the 655,000 it added in the category in the year-ago quarter. AT&T ended the third quarter with 12.1 million U-verse broadband subs, which currently represent 73% of all AT&T wireline broadband customers, versus 59% in the year-earlier period.

AT&T also added 44,000 U-verse high speed broadband business subscribers in the quarter. AT&T said about 60% of U-verse broadband subscribers take a plan offering at least 12 Mbps.

With DSL numbers factored in, AT&T’s broadband sub base increased by 38,000 in the third quarter.

At the end of the quarter, U-verse TV penetration was close to 22% while U-verse broadband penetration was 21%

Total third-quarter wireline revenues were $14.6 billion, down 0.4% from the year-ago period, and down slightly from the second quarter of 2014. However, total U-verse revenues surged 23.8% and now represent 64% of AT&T's wireline consumer revenues, up 54% versus the year-ago quarter. AT&T said U-verse overall now represents a $15 billion annualized revenue stream.

AT&T, which is trying to merge with DirecTV, posted consolidated revenues of $33 billion, up 2.5%, and net income of $3 billion, or 58 cents per diluted share, down from $3.8 billion (72 cents) in the year-ago quarter.

Analysts were expecting earnings of 64 cents on revenues of $33.24 billion. AT&T shares were down 55 cents (1.59%) to $33.95 each in after-hours trading Wednesday.