American telecom carrier AT&T today raised its 2014 guidance for revenue growth to be in the 5 percent range.
It also reaffirmed its 2014 guidance for stable consolidated margins, adjusted earnings per share growth at the low-end of the mid-single digit range, capital expenditures in the $21 billion range and free cash flow in the $11 billion range.
AT&T, which said its Project VIP network transformation plan, announced in 2012, is ahead of schedule, is expecting mobile and wireline revenue to support its income growth for the current year.
The telecom operator said its 4G LTE network now covers nearly 290 million people.
The company’s Project VIP broadband build is expected to take fiber to more than 400,000 new business customer locations by the end of the second quarter.
AT&T said its postpaid subscriber net adds will be exceeding 800,000 in second quarter of 2014, while postpaid churn will be 0.95 percent or lower.
In addition, the company is expecting 3.2 million AT&T Next smartphone sales, which have increased in the quarter. Smartphone sales are expected to be approximately 50 percent of total sales.
AT&T said nearly one-half of the company’s postpaid smartphone customer base on no-device-subsidy Mobile Share Value pricing plans will be growing to approximately two-thirds by year-end.
AT&T said its Next and Mobile Share Value plans are driving a shift in the company’s wireless revenue components — resulting in higher equipment revenues and lower service revenues and ARPU, with no service revenue growth expected in the second quarter.
The company expects second-quarter wireless service EBITDA margins to be pressured year over year due to the increased sales activity and strong customer movement to the no-device-subsidy Mobile Share Value plans. Wireless service EBITDA margins are expected to be over 40 percent in each of the three remaining quarters of 2014.
