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AT&T reports strong EPS growth with solid wireless gains

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Sharath Kumar
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DALLAS, USA: AT&T Inc. has reported solid third-quarter results with strong revenue and earnings growth driven by continued gains in the company's key growth drivers - mobile and IP data, U-verse and strategic business services.

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"We're setting the standard for 4G LTE speeds and network reliability. Our fiber and U-verse expansion projects are ahead of schedule bringing high-speed broadband to millions more customers," said Randall Stephenson, AT&T chairman and CEO. "With these initiatives, we're seeing excellent growth across our major platforms - mobility, U-verse and strategic business services."

Third-Quarter Financial Results

For the quarter ended September 30, 2013, AT&T's consolidated revenues totaled $32.2 billion, up 2.2 percent versus the year-earlier quarter.

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Compared with results for the third quarter of 2012, operating expenses were $26.0 billion versus $25.4 billion; operating income was $6.2 billion versus $6.0 billion; and operating income margin was unchanged at 19.2 percent. Third-quarter 2013 net income attributable to AT&T totaled $3.8 billion compared to $3.6 billion in the year-earlier quarter. Earnings per share was $0.72 per diluted share versus $0.63 per diluted share in the year-earlier quarter, a 14.3 percent increase. Adjusted for gains of 3 cents from a previously disclosed transfer of spectrum and 3 cents from income tax items, earnings per diluted share was $0.66 compared to $0.62 in the year-ago quarter, up 6.5 percent.

Third-quarter 2013 cash from operating activities totaled $9.2 billion, and capital expenditures totaled $6.0 billion. Free cash flow - cash from operating activities minus capital expenditures - totaled $3.2 billion. During the third quarter, the company repurchased 55 million shares for $1.9 billion. At the end of the quarter, 216 million shares remained on the current authorization. The company expects to make future repurchases opportunistically.

As part of its Project VIP-related LTE deployment, the company now covers nearly 250 million POPs in more than 435 markets with the nation's fastest, and now most reliable, 4G LTE network, according to independent third-party data. The company's LTE network is expected to cover approximately 270 million POPs by year-end 2013 and to be substantially complete by the summer of 2014.