AT&T Inc posted a higher quarterly profit on Thursday bolstered by growth in Internet and wireless subscribers, and raised its estimate of benefits from the BellSouth acquisition. AT&T shares rose 1.7 percent in early trading on the New York Stock Exchange, to $37.5, after rising more than 3 percent in premarket trading.
The top US telecoms company said profit, including its stake in Cingular Wireless but excluding merger-related costs and other special items, rose 38.5 percent from a year earlier, to $2.4 billion, or 61 cents a share. That beat by a penny the average analyst forecast of 60 cents per share, according to Reuters Estimates.
AT&T closed its merger with BellSouth Corp on December 29, which reinforced its position as the biggest US phone company and brought their mobile service joint venture, Cingular, under one roof. AT&T owned 60 percent of Cingular before the merger.
It said it expects synergies from the BellSouth merger to total $800 million to $1.2 billion in 2007, up from an earlier forecast of $500 million to $800 million.
AT&T also raised its estimate of synergies in 2008 and 2009, and said it now sees the net value of synergies to be around $22 billion, up from a previous estimate of $18 billion. It said it now expects to deliver double-digit percentage growth in adjusted earnings per share in 2007 and 2008.
AT&T said fourth quarter net income, including costs such as those related to recent mergers, rose 17.1 percent from a year earlier to $1.9 billion, or 50 cents per share.
Cingular, which is being rebranded as AT&T, said on Wednesday its quarterly profit nearly quadrupled, boosted by stronger-than-expected customer additions. AT&T also released BellSouth's quarterly results. BellSouth's adjusted earnings per share totalled 68 cents per share, up 28.3 percent from the year-ago quarter.
The company reiterated its plan to finish buying back $10 billion in shares in 2007. It repurchased 39 million of its shares for $1.3 billion, bringing its 2006 buyback total to $2.7 billion.
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