AT&T doubles profit in first quarter

AT&T on Tuesday pointed to high wireless revenue for driving the company to a $2.8 billion profit in the first quarter, twice what it earned for the same period last year.

The financial report showed the success of its move to acquire BellSouth in 2006, CEO Edward Whitacre said in a statement. AT&T reported revenue of $29 billion for the quarter ending March 31, far above the $15.8 billion it earned in the first quarter last year.

The company has had a frantic era of merger activity. Integration costs hit $2 billion for AT&T’s 2006 acquisition of BellSouth, its 2005 acquisition of AT&T Corporation, and its 2004 sale of AT&T Wireless to Cingular Wireless (which itself was an AT&T joint venture with BellSouth). Other special charges on its 2007 first quarter figures included a gain of $409 million from the sale of certain wireless divisions to T-Mobile and a loss of $301 million from merger-related advertising and publishing revenues.

Taken together, AT&T reported earnings of 65 cents per share, including merger costs and gains from the sale of certain wireless assets, up 25 percent from its earnings of 52 cents for the same period last year. But even without the impact of the merger, AT&T said it earned 45 cents, up by a similar margin over a comparable number of 37 cents last year.

Much of the company’s first quarter success came from a strong wireless sector, which generated $10 billion in revenue, up 11.2 percent over the same period last year. AT&T’s wireless data revenue grew even faster, rising 66.8 percent to $1.5 billion, thanks to consumer and business use such as messaging, browsing, and laptop and smartphone connectivity. During the quarter, the company’s 33 million wireless data customers sent 14 billion text messages alone — more than 424 by each average user.

AT&T also said the growth came from growing popularity of its new 3G UMTS (Universal Mobile Telecommunications System) and HSDPA (High Speed Downlink Packet Access) network, which now reaches 65 cities and is on schedule to reach most of the top 100 markets in the United States later this year.

In comparison, AT&T’s wireline results had less spectacular growth but still showed “solid progress” in merger integration and continued progress in enterprise and regional business revenue growth, the company said in a release.