AT&T turns in solid Q2 report with 1.2M new smartphone subscribers

Summary:Smartphones played a big role in the quarterly report as AT&T sold a record 6.8 million smartphones during the last three months.

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AT&T reported earnings after the bell on Tuesday, and the numbers looked up across the board.

The nation's second largest mobile provider reported a second quarter net income of $3.8 billion, or 71 cents per share (statement).

Non-GAAP earnings were 71 cents per share on a revenue of $32.1 billion, up 1.6 percent from the same time last year.

Wall Street was looking for earnings of 68 cents per share on a revenue of $31.81 billion.

Smartphones played a big role in the quarterly report as the telco giant sold a record 6.8 million smartphones during the last three months.

AT&T added 1.2 million new smartphone subscribers during the quarter, and smartphones accounted for 88 percent of postpaid phone sales.

By the end of the quarter, 73 percent (49.5 million) of AT&T's total postpaid phone subscriber base had smartphones -- up from 64 percent (43.1 million) at this time last year.

Smartphone data usage per device was also up by 50 percent year-over-year.

AT&T added 632,000 total wireless subscribers overall, including 398,000 postpaid tablet users.

CEO Randall L. Stephenson described the quarter as "solid" in prepared remarks, highlighting customer additions in particular:

Our 4G LTE network is the fastest and the most reliable in the nation, and deployment is ahead of schedule. That contributed to a step-up in postpaid subscriber gains, and strong mobile data revenue growth of nearly 20 percent. Growth in U-verse and strategic business services also continued to be strong — adding to our momentum.

However, the business service side was a bit of a mixed bag.

Total revenues from business customers were $8.9 billion, down 2.2 percent on an annual basis but still up slightly on a quarterly basis.

However, revenues from strategic business services such as VPN, Ethernet, hosting and other advanced IP services grew by more than 15 percent annually, representing an $8.4 billion annualized revenue stream.

For the outlook, Wall Street wants AT&T to deliver earnings of 68 cents per share with a revenue of $32.08 billion at the end of the third quarter.

AT&T did not provide third quarter guidance in its second quarter report. It maintained its annual outlook.

Regardless, there are plenty more stats available in the Q2 report. Here are some of the highlights, by the numbers:

  • Wireless revenues were up 5.7 percent annually to $17.3 billion.
  • Service revenues were up 4.1 percent annually to $15.4 billion.
  • U-verse revenues (including business) were up 30.1 percent annually.
  • AT&T also added 641,000 high speed Internet subscribers and 233,000 U-verse TV subscribers.
  • Subscribers on usage-based data plans grew from 26.6 million in Q2 2012 to 35.1 million in Q2 2013.

Topics: Mobility, AT&T, Smartphones, Tech Industry

About

Rachel King is a staff writer for CBS Interactive based in San Francisco, covering business and enterprise technology for ZDNet, CNET and SmartPlanet. She has previously worked for The Business Insider, FastCompany.com, CNN's San Francisco bureau and the U.S. Department of State. Rachel has also written for MainStreet.com, Irish Americ... Full Bio

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