U.S. wireless giant AT&T beat Wall Street revenue forecasts Tuesday afternoon despite the loss of 363,000 postpaid phone subscribers in the January to March quarter.
The company raked in $40.53 billion in total revenue in the first quarter and posted an adjusted earnings per share (EPS) of 72 cents. The figures squeaked past analyst expectations of $40.49 billion in revenue and an EPS of 69 cents. Net income amounted to $3.8 billion.
Wireless segment revenues of $18 billion were down about 1.3 percent from $18.2 billion the first quarter of 2015 thanks to a $200 million dip in equipment revenues. The postpaid upgrade rate for the quarter was 5 percent, down from 6.6 percent last year, AT&T said.
Wireless service revenues were flat year over year.
AT&T said it pulled in 1.8 million domestic wireless subscribers during the quarter, driven by connected devices, branded phones, and tablets. The additions included 344,000 postpaid tablet and computing devices, AT&T said.
The company also said it had 629,000 branded pre-and postpaid net additions, including 480,000 branded smartphone additions.
But despite adding 129,000 postpaid subscribers overall and 500,000 prepaid subscribers via Cricket and GoPhone, AT&T said it lost a total of 363,000 postpaid phone subscribers, primarily lower ARPU feature phones.
A bright spot for the carrier proved to be average revenue per user (ARPU), which increased 5.1 percent year over year to $69.54. AT&T includes its Next subscriber installment billings in its ARPU figure.
AT&T said nearly half of the carrier’s smartphone base is now on Next installment billing and 90 percent of postpaid smartphone sales and upgrades in the quarter were either on Next or BYOD. More than 70 percent of postpaid smartphone subscribers are on a no-device subsidy plan, the company said.
AT&T CFO John Stevens said the carrier’s unlimited plan for DirecTV and U-verse subscribers has also been a success. According to Stevens, the plan has drawn in more than three million subscribers since its introduction in January. That figure is up more than one million subscribers from the last report on the program in March.
Postpaid churn for the quarter was 1.10 percent, up from 1.02 percent during the same quarter last year. Total customer churn was fairly flat at 1.42 percent, compared to 1.40 in the first quarter 2015.