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AT&T Quarter in Line

It beats on the bottom line but is a little light on top.
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AT&T (T) - Get AT&T Inc. Report beat first-quarter targets and said its integration of the BellSouth merger is proceeding apace.

The San Antonio-based telco made $2.85 billion, or 45 cents a share, up from the year-ago $1.45 billion, or 37 cents a share. Excluding certain costs, earnings were 65 cents a share in the latest quarter. Revenue rose 84% from a year ago, bolstered by the acquisition, to $28.97 billion.

Analysts surveyed by Thomson Financial were looking for a profit of 61 cents a share on sales of $29.57 billion.

Wireless revenue rose 11% from a year ago and wireline revenue fell 3.2% on a pro forma basis, including the results of BellSouth in both periods.

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AT&T's total wireless revenues grew 11.2% in the first quarter to $10.0 billion, according to a press release. Service revenues, which exclude revenues from sales of handsets and accessories, grew to $9.1 billion, up 13.5% vs. the year-earlier quarter, reflecting solid subscriber gains and robust growth in data revenues.

Primary consumer lines across the 22 states where AT&T has its regional operations declined by 285,000 in the first quarter, compared with declines of 251,000 in the first quarter of 2006 and 331,000 in the fourth quarter of 2006, the company said.

AT&T's video connections -- including AT&T U-verse service and bundled satellite television service -- increased by 187,000 in the first quarter, up from 111,000 total video net adds in the preceding quarter. At the end of the first quarter, AT&T had 1.7 million total video connections in service, up 520,000 over the past four quarters, and 5.2% of AT&T's primary consumer lines also had a video account with AT&T.

AT&T's high-speed Internet connections -- including DSL, AT&T U-verse high-speed Internet and satellite broadband services -- increased by 691,000 in the first quarter, their largest gain over the past four quarters, the company said. At the end of the first quarter, AT&T had 12.9 million high-speed Internet connections, up 2.3 million, or 21.6%, on a pro forma basis over the past year.

AT&T repurchased 81 million of its shares in the first quarter for $3.0 billion and ended the quarter with 6.2 billion shares outstanding.