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AT&T’s Wireline Revenue Continued to Decline in 2Q15



AT&T’s wireline revenue in 2Q15

In the earlier parts of this series, we looked at the 2Q15 core operating and financial metrics of AT&T’s (T) wireless segment. Now, we will look at the wireline segment. The wireline division accounts for a significant part of AT&T with revenue of ~$14.2 billion in 2Q15. Plus, as we mentioned in earlier parts of the series, the wireless division reported ~$18.3 billion in revenue during the quarter. The declining trend in AT&T’s wireline revenues continued during 2Q15. The segment declined by ~1% YoY (year-over-year), even after excluding 2Q14 results of Connecticut operations.

AT&T sold its Connecticut wireline operations to Frontier Communications (FTR) in October 2014. The segment continued to face the sector’s trend of shrinking legacy data and voice services. Other companies such as Verizon (VZ) and CenturyLink (CTL) also face these challenges.

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Business solutions division has a negative impact on AT&T’s wireline revenue

Revenue from AT&T business solutions continued its declining trend. Adjusted revenue from the subsegment declined ~3.9% YoY to ~$8.2 billion in 2Q15. On the positive side, adjusted strategic service revenue increased by a significant ~13.6% YoY. At the end of 2Q15, strategic services represented ~33% of the subsegment’s revenue.

Wireline consumer division continued to grow modestly in 2Q15

The wireline segment’s adjusted consumer revenue increased ~3.7% YoY to ~$5.8 billion during the quarter. AT&T’s U-verse, the fiber-based offering, continued to support the subsegment’s growth. We will talk more about the performance of U-verse in the next part of this series.

You can consider diversified exposure to AT&T by investing in the iShares Core S&P 500 ETF (IVV). IVV had ~1% exposure to the company as of June 30, 2015. Alternatively, you could get exposure with the iShares Russell 1000 Value ETF (IWD). IWD had ~1.8% exposure to AT&T at the end of June.


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