AT&T earnings propelled by iPhone activations, connected devices like e-readers, GPS systems

Updated: AT&T said Wednesday that it added 1.9 million wireless subscribers in the first quarter as the company continued to benefit from smartphone adoption and a bevy of connected devices such as e-readers, alarms and global positioning systems.

Updated: AT&T said Wednesday that it added 1.9 million wireless subscribers in the first quarter as the company continued to benefit from smartphone adoption and a bevy of connected devices such as e-readers, alarms and global positioning systems. In addition, AT&T activated 2.7 million iPhones.

Add it up and it's clear that AT&T's growth resides in behind-the-scenes connections instead of direct post paid subscribers. To wit: Connected devices in service jumped 1.1 million in the first quarter to hit 5.8 million. Retail postpaid net additions were 512,000. Overall, AT&T has 87 million wireless subscribers.

AT&T reported first quarter earnings of $2.5 billion, or 42 cents a share, on revenue of $30.6 billion, flat with a year ago (statement). Excluding a 17 cents a share charge due to the removal of Medicare tax subsidies in the health care bill, AT&T reported earnings of 59 cents a share. Wall Street was expecting earnings of 54 cents a share on revenue of $30.7 billion.

Speaking on a conference call with analysts AT&T Chief Financial Officer Rick Lindner was upbeat. Lindner made the following points:

  • The economy is showing "some encouraging signs."
  • Business spending is improving, but any recovery is a wild card.
  • Post paid growth will slow (as prepaid plans become more popular), but revenue growth will be driven by data consumption.
  • AT&T is adding more cellphone towers and other capital improvements.

In addition, AT&T reiterated that it is continuing to improve its network.

By the numbers:

  • AT&T's postpaid churn rate fell to 1.07 percent in the first quarter, down from 1.15 percent a year ago. Total churn was 1.3 percent.
  • Wireless data revenue was up 29.8 percent from a year ago to $4.1 billion. Text messages on AT&T's network jumped 50 percent to 143 billion. Average revenue per unit increased 3.9 percent to $61.89.
  • AT&T said half of AT&T's 65.1 million postpaid subscribers had smartphones. iPhone growth has surged.
  • On the TV side of the house, AT&T added 231,000 U-verse subscribers to hit 2.3 million total. That's up from 1 million a year ago.

  • AT&T added 255,000 net broadband connections, the best showing in a year.
  • In the enterprise, AT&T said business services revenue was improving. Business long distance revenue grew sequentially for the first time in six quarters.

Newsletters

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
See All
See All