On Thursday, AT&T announced earnings for the third quarter of the year, which ended on September 30th. In that quarter, they finished the acquisition of DirecTV, which is partially why their consolidated revenues are up 19% year-over-year. AT&T's consolidated revenues were $39.1 billion. As far as customers go, the company saw 26,000 DirecTV Net adds, 192,000 IP Broadband net adds (read: those that get their home internet from AT&T), and 2.5 million AT&T Mobility Domestic net adds.
Let's break down AT&T Mobility's numbers real quick. There were 755,000 branded net adds for the quarter, this includes solid phone net adds. 289,000 postpaid and 466,000 prepaid net adds. AT&T states that is their best prepaid net add quarter in about 8 years, primarily thanks to GoPhone and Cricket. They also added 1.6 million connected devices, with 1 million of those being connected cars. AT&T also had nearly 1 million branded smartphones added to their customer base. That includes both prepaid and postpaid. AT&T also announced that churn is at 1.33%, with postpaid churn at 1.16%. And churn is down year-over-year. For those that are unaware, churn represents the number of users coming to AT&T vs the number of users leaving AT&T for another carrier. So it's a very important metric in figuring out if the carrier can retain their customers.
"We now have integrated solutions that are unlike any competitor in the market," said Randall Stephenson, AT&T chairman and CEO. "With our national wireless and video capabilities, as well as our extensive broadband network, we now have assets that make us a unique competitor and the first scaled, fully-integrated U.S. service provider."
While consolidated revenues were at $39.1 billion for the quarter, operating expenses were $33.2 billion for the quarter, vs $27.4 billion for the same period last year. Operating income was $5.9 billion for the quarter, compared to $5.6 billion for the same period last year.
AT&T has also updated their outlook, stating that the company is increasing their adjusted EPS as well as free cash flow outlook for this year. AT&T is currently expecting that adjusted EPS will be $2.68 to $2.74 area, and free cash flow around the $15 billion range or even better. AT&T didn't mention anything about their networks in Mexico, however you will notice they have started to say "domestic net adds", so it's likely to be added to future earnings reports.
So AT&T has set the bar for net adds in the third quarter. Verizon announced earlier this week that they added 1.3 million customers, and AT&T added 2.5 million. Now we sit and wait for Sprint and T-Mobile who will be announcing their earnings next week.