NEW YORK (TheStreet) -- AT&T (T) reported higher financials on both its top- and bottom-line in its most recent quarter, proving the second-largest U.S. carrier still has some tricks for growth on speed dial.
Over the three months to March, the company reported earnings of 71 cents a share, a penny higher than analysts surveyed by Thomson Reuters had expected. Revenue was up nearly 4% year over year to $32.48 billion.
Quarterly revenue increase was boosted by the popularity of NEXT, a pricing model it launched in July last year which charges for handset devices separately from wireless plans. Previously AT&T would pay upfront charges to smartphone makers to offer the latest model at discount to consumers if they signed up for long-term contracts and made a down payment.Through NEXT, customers can upgrade easily with the cost of the handset paid off in installments over the contract period. With no down payment necessary, customers are more likely to upgrade more often and AT&T receives a steady stream of immediate revenue each month. The company said 35% of wireless customers made the move to a NEXT plan this quarter, a rate it believes it can maintain. AT&T also raised its forecast for full-year revenue growth to at least 4% from a previously-guided 3%. TheStreet Ratings team rates AT&T INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation: "We rate AT&T INC (T) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, notable return on equity, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
- You can view the full analysis from the report here: T Ratings Report
STOCKS TO BUY: TheStreet's Stocks Under $10 has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
WATCH: More market update videos on TheStreet TV
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV