AT&T (NYSE: T) reported Q4 revenue of $30.3 billion, up 91 percent from last year’s $15.89 billion—largely due to the merger of AT&T and SBC. On a pro-forma basis, total revenue grew by 2.9 percent compared to the prior year’s quarter. Net income in the quarter came to $3.1 billion, up from $1.9 billion, however on a per share basis earnings were flat (again, reflecting the merger). Excluding costs associated with the merger, net income grew to $4.3 billion, from $2.4 billion, with earnings per share growing by 16.4 percent. Some highlights:

-- Q4 wireless revenue hit $11.4 billion, up 16.3 percent from the prior year’s quarter. ARPU grew 1.9 percent year over year.
-- Data service revenue, which includes messaging, grew 57.5 percent.
-- AT&T had 2.7 million net subscribers adds in the fourth quarter, bringing its total subscriber base to 70.1 million.
-- The company expects the wireless service business to continue growing in the mid-teens.

Release | Webcast | Slides (.pdf) | Transcript (via SeekingAlpha)

Conference Call: Wireless growth is still the main story at AT&T, as the business was helped by subscribers adds and the data-driven ARPU uptick. While the numbers looked solid, much of the call was spent trying to get a sense of the future, as economic concerns weigh heavily.

-- Economy:Earlier this month, AT&T COO Randall Stephenson caused tremors when he warned of economic weakness, impacting wireline access and broadband businesses. This obviously remains a top concern. Following a long-winded question from an analyst, Lindner explained that the January comments weren’t really much different than what the company was saying in December, but obviously the market and the media heard things differently. “Where we saw some softness, as we’d mentioned, were in access lines… and we saw it in some slowing in broadband net adds. In both of those cases, those products are impacted by things we see in the housing market. They’re impacted by, as well, some small uptick in non-paid disconnects… For both products, this has resulted in 10bp of additional churn.” As for the company’s current outlook, these economic issues are already “baked in”. “As you look across the rest of the business, we’re clearly not seeing any impacts on our wireless business at this point… the economy is always a risk, but when you look across our business, we’re relatively defensive.” ARPU growth is being driven by data and that data growth is driven by new devices. Together, those things are opening up a whole new host of applications that I think will bring value to our customers.” “Even in broadband… when you annualized the broadband net adds, they’re still growing at better than a double-digit pace.”

-- iPhone: “40 percent of subscribers are new to AT&T”. iPhone ARPU is approximately double the average from the rest of the company. However payments made to Apple (NSDQ: AAPL) are not broken out, so the profitability of each iPhone customers isn’t totally clear. AT&T ended the year with just under 2 million iPhone subs, so there’s a gap between that and the 4 million iPhones that Apple claims to have sold. Various reasons for the gap: international sales, unactivated iPhones (some of which will never be activated on AT&T), and iPhones that AT&T has bought form Apple, but which they haven’t sold to customers. Update: Bernstein analyst Toni Sacconaghi (via Tech Trader Daily) tried to break down gap between what Apple has sold and AT&T’s subscriber rolls. Based on his estimates for Europe sales and the number of iPhones bought to be unlocked, there may be 670,000 units sitting in channel inventory. Based on the number of AT&T retail outlets, each store could have between 150-200 iPhones in the shelves, perhaps suggesting that demand for iPhones is not quite as robust as thought. And it may be a headwind for iPhone sales in the coming quarter, as AT&T works through its inventory.

-- Data: Lindner reiterated a point that the company has been making for awhile, that the number of customers with data plans remains low, so there’s still a lot of headroom on this front. Only 12 percent of customers have advanced, smartphone-type handsets. As with the iPhone, these customers have ARPU that’s double the average. At the end of the year, there were 9 million 3G subscribers.

• Earnings: AT&T Reports Record Number Of Mobile Subs In Q307, Now Up To 65.7 Million