Alltel Corp. of Little Rock said Wednesday that earnings dropped 5 percent on a 19 percent revenue increase, as costs related to an acquisition and its wireline spinoff dragged on results.
The telecommunications firm reported net earnings of $297.4 million, or 77 cents per share, for its first quarter, compared with $313 million, or $1.03 per share, during the same quarter last year.
Alltel’s earnings were a penny shy of Wall Street expectations. Analysts polled by Thomson Financial expected earnings of 78 cents a share.
Without one-time items, including a gain in discontinued operations and expenses from the integration with Western Wireless Corp., Alltel’s earnings would have been 82 cents per share.
Last August Alltel completed its $6.5 billion acquisition of Western Wireless Corp. of Bellevue, Wash.
Alltel added 165,000 net wireless customers in the quarter. Its churn, or the number of customers who cancel service, was 2 percent, down from 2.1 percent the same quarter last year. And churn for long-term customers was 1.7 percent.
Average monthly revenue per user was $50.90, up 4 percent from last year.
Last week the company rolled out a plan aimed at improving average monthly revenue per user. The new plan, My Circle, allows customers to make free, unlimited calls to as many as 10 phone numbers, even if they are not on an Alltel plan.
My Circle is available to Alltel customers with plans $59.95 a month or higher.
Alltel reported a 3 percent drop in wireline sales to $575 million. The company lost 23,000 wireline phone customers but added 44,000 high-speed Internet customers.
Alltel now has 2.86 million wireline phone customers and 441,000 high-speed Internet accounts.
In December Alltel announced the spinoff of its wireline division. The tax-free deal, still subject to regulatory approval, will make Alltel a pure wireless company with 11 million customers in 34 states. And earlier this month it was announced that the new, publicly traded company will be called Windstream Communications and will be based in Little Rock.
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