May 4, 2006

Alltel Corp. posted mixed first quarter results, with strong wireless growth and healthy customer numbers.

However, the company's net income numbers were lower due to merger-related expenses from the acquisition of Western Wireless Corp. and the upcoming spin-off of the company’s wireline operations.

Alltel’s total revenues were up almost 20 percent to $2.5 billion, in line with analysts’ expectations. But Alltel’s net income was about $300 million, which was 5 percent lower than the same period last year.

On the wireless side, Alltel beat analysts’ expectations on customer figures, adding 165,000 new customers and reducing its churn rate to 2 percent, a sequential reduction of 0.2 percent from the fourth quarter of 2005.

The carrier also continued to buck the industry trend of lower average revenue per user—instead, it increased ARPU by about 4 percent compared to 2005’s first quarter, to $50.90. Of that, more than 5 percent—or $2.86—came from data services, a 59-percent increase over the first quarter of 2005.

“We are very pleased with the performance of the wireless business and are encouraged by the opportunities we see going forward,” said Scott Ford, Alltel’s president and chief executive officer.

The company said it is on track to complete the spin-off of its wireline business and the merger of that business with Valor Corp. by mid-year.

Alltel’s stock was down less than 1 percent in trading.

Source: RCR