AT&T posted a 2 percent increase in overall revenue, to $33.2 billion, in the fourth quarter of 2013, helped by higher revenue from mobile and U-verse service subscribers.
U-verse is now a $13 billion annualized revenue stream growing at 28 percent year-over-year and makes up 57 percent of AT&T’s total consumer revenues.
The company added 630,000 U-verse broadband subscribes in the fourth quarter and 2.7 million during the year. U-verse now represents more than 60 percent of AT&T’s total broadband base (U-verse plus standard DSL).
AT&T has been gradually extending the reach of its fiber, which serves to help accelerate DSL speeds. The company said that nearly two-thirds of the U-verse TV footprint, cutting across markets in nearly 40 states, can now get broadband speeds up to 45 megabits per second.
The peak year for the ongoing build-out, called Project VIP, will be this year, AT&T executives reminded. 2014 capital expenditures on VIP, wireless network build-outs and other projects will be in the $21 billion range.
AT&T also added almost 200,000 U-verse video subscribers in the quarter, and nearly 1 million for the year. CFO John Stephens, said the company also had its lowest TV churn ever in the fourth quarter.
“That tells us that customers not only want U-verse but they stay with us once they get it,” Stephens said during the company’s conference call with analysts. AT&T executive quotes are from a transcript provided by Seeking Alpha.
AT&T said it will continue to expand its TV everywhere line-up.
The company is also beginning to sell U-verse, specifically U-verse broadband, in the business market. VPN, Ethernet, cloud, hosting and other advanced IT services for the business market are also growing, the company reported.
CEO Randall Stephenson vowed to expand the Digital Life home automation service into more markets, and the company will be aggressive with connected cars, having announced agreements with GM and Ford, Nissan, Audi, BMW, and Tesla, with more to come.
The nation's biggest telecommunications company said that it earned $6.9 billion, or $1.31 per share, in the October-December period. That's up from a loss of $3.8 billion, or 68 cents per share, in the same period a year earlier.
The latest quarter's results included a pension-related gain of $7.6 billion, tax expenses and other items. Excluding these items, adjusted earnings were 53 cents per share in the latest quarter, beating analysts' expectations by 2 cents. The year-ago results included a loss of $10 billion related to pension accounting.
Revenue rose 2 percent to $33.2 billion from $32.6 billion.
Analysts on average were expecting revenue of $33.1 billion, according to FactSet.
Wireless revenue, which includes equipment sales, grew 5 percent to $18.4 billion from $17.6 billion.
AT&T said it added 809,000 net wireless subscribers in the fourth quarter. It added 566,000 wireless devices to its contract-based plans, which are the most lucrative. Of these 299,000 were smartphones and the rest tablets, which carry lower monthly fees than phones. AT&T is the second-largest cellphone company in the U.S. after Verizon Wireless.
Churn, or the turnover rate for contract-based subscribers, was 1.11 percent during the quarter, down from 1.19 percent a year earlier.
AT&T is benefiting from the growing popularity of smartphones and tablet computers. In the wireless segment, data is now a $23 billion annualized revenue stream and it’s continuing to grow growing at nearly 17 percent, the company reported.
That said, the company is also facing competition from Verizon Wireless as well as smaller rivals such as T-Mobile and Sprint Corp.
On Monday, AT&T announced that it does not plan to make an offer for British mobile phone company Vodafone in the near future. The announcement means AT&T is restricted from initiating a bid on Vodafone in the next six months, according to British takeover rules. But it can respond to an offer initiated by Vodafone, or it can make a bid in response to an offer from another company.
Shares of AT&T fell 61 cents, or 1.8 percent, to $33.09 in after-hours trading following the release of the earnings report. It closed the regular trading session up 19 cents at $33.70.
--The Associated Press contributed to this report.