AT&T's third quarter earnings were on target with estimates as the company activated a record 5.2 million iPhones amid a total of 8 million smartphones.
The company reported third quarter earnings of $12.3 billion, or $2.08 a share, on revenue of $31.6 billion, up 2.8 percent from a year ago (statement). Those earnings were inflated by one-time gains that included a tax settlement and the sale of Sterling Commerce to IBM. Strip out those gains and earnings were 55 cents a share, in line with Wall Street estimates. AT&T's revenue was better than the $31.2 billion expected.
Among the key moving parts in the third quarter:
- AT&T added 2.6 million wireless subscribers and now has a total of 92.8 million. These gains were fueled by connected devices---e-readers, security systems and GPS devices---instead of people. AT&T added 745,000 postpaid customers and 321,000 prepaid.
- Postpaid churn was 1.14 percent. Total churn was 1.32 percent.
- 80 percent of postpaid sales were smartphones.
- Wireless data revenue was $4.8 billion, up 30.5 percent from the third quarter a year ago.
- Wireless service revenue was $13.7 billion, up 10.5 percent from a year ago.
- The company added 236,000 U-Verse TV subscribers and most of those companies also got the U-Verse Internet service. U-Verse revenue in the third quarter was $1.1 billion.
- Business service revenue continued to stabilize, but were down 3.9 percent from a year ago to $9.5 billion.
- The company also reiterated its 4G migration plan.