AT&T (T) beat first-quarter earnings targets Tuesday and said it's on track to hit cost-savings targets in its acquisition of the former Ma Bell operations in New Jersey.
The San Antonio, Texas, telco made $1.45 billion, or 37 cents a share, in the quarter ended March 31, up from the year-ago $885 million, or 27 cents a share. Excluding charges related to the SBC-AT&T merger of November 2005, latest-quarter earnings were 52 cents a share, 4 cents ahead of the Thomson Financial analyst consensus estimate. Revenue rose to $15.8 billion from $10.2 billion a year earlier.
The company cited strong gains at its Cingular Wireless unit for the latest quarter's improvements. AT&T said it added 511,000 regional digital subscriber line, or DSL, subscribers in the latest quarter, putting total DSL lines at 7.4 million. Wireline revenue fell 5.5% from a year ago on a pro forma basis to $14.7 billion. Regional retail consumer lines declined by 267,000 in the first quarter, generally in line with recent quarters.
AT&T said enterprise revenue fell 6.9% from a year ago in the first quarter, slowing the previous quarter's 9% drop, and mass market revenue at the old AT&T dropped 27.3% from a year earlier.
"Merger integration is moving forward on plan," CEO Ed Whitacre said. "Immediately after the SBC/AT&T merger closed in November, we started the process of combining operations, and we've made good progress. At this point, detailed network transition plans are in place, our front-line enterprise sales force consolidation is complete, and we are now able to sell our high-end enterprise portfolio to the small- and medium-business space. We are very much on track to achieve our previously announced merger synergies of $600 million to $800 million this year, growing to approximately $2 billion next year."
AT&T agreed last month to buy
in a deal that will consolidate AT&T's control of Cingular.