AT&T revenue down slightly, but net income up
Mobile additions continues to drive income growth for the company
IDG News Service - AT&T's revenue was down slightly in the third quarter of 2011, compared to a year earlier, but net income rose by about $400 million, on a comparable basis, driven by strong growth in its mobile and broadband divisions.
AT&T on Thursday reported revenue of $31.5 billion, down $103 million, or 0.3%, from the third quarter of 2010. Net income was $3.6 billion, while net income excluding one-time items in the third quarter of 2010 was $3.2 billion.
The company reported net income, including one-time items of $12.3 billion in the third quarter of 2010, including income from a tax settlement and the sale of business-to-business commerce firm Sterling Commerce to IBM.
Earnings per share were 61 cents, meeting analyst expectations, with AT&T reporting 54 cents per share in the third quarter of 2010, on a comparable basis.
The company reported a net gain of 2.1 million mobile customers in the quarter, bringing its total customer base to 100.7 million.
"Mobile broadband growth continues to be robust, execution was strong across the business, and we delivered another solid quarter," Randall Stephenson, AT&T chairman and CEO, said in a statement.
AT&T sold 4.8 million smartphones during the quarter, and sales of Android devices more than doubled year over year, the company said in a press release. The company activated 2.7 million Apple iPhones during the third quarter, the lowest number of iPhone activations since the first quarter of 2010, noted Kate Price, a senior analyst for networking and mobility at Technology Business Research (TBR).
AT&T is seeing competition from other carriers for the iPhone, Price said. Verizon Wireless and Sprint Nextel now both offer iPhones.
"Subscribers largely anticipated the release of an iPhone 5 in fall, which drove them to wait to upgrade their device, and increased competitive pressure from Verizon Wireless contributed to lower iPhone activations," she said in an e-mail. "AT&T is feeling the increased level of competition from the loss of iPhone exclusivity."
AT&T should see more iPhone additions in the next quarter, with the iPhone 4S announced this month, Price said. AT&T's embrace of Android, which happened about the same time it lost its iPhone exclusivity, should help the company going forward, she said. The move to Android "will help AT&T increase smartphone penetration and offer more variety in the smartphone device lineup," she said.
AT&T's mobile revenue was up 2.8% year over year to $15.6 billion. Mobile data revenues increased by $857 million, or 18%, to $5.6 billion.
The company's wireline division revenue was down 2.2%, from $15.3 billion to $15 billion. Wireline net income was down from $2 billion to $1.8 billion.
AT&T, however, reported growth in numbers of its U-verse television and, especially, broadband customers. U-verse TV added 176,000 subscribers during the quarter to reach 3.6 million. U-verse broadband added 504,000 subscribers to reach 4.6 million, although most of those gains were offset by losses of DSL customers.
Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is firstname.lastname@example.org.
- Aberdeen Group: Marketing Analytics for Manufacturing: Forging Customer Insights There are no recalls for poor marketing. Manufacturers need to get their customer intelligence and messaging right the first time. Learn how.
- The Brave New World of Customer-Centric Manufacturing The Unique Opportunity for Manufacturers to Better Understand their Consumers
- See the Possibilities Utilizing Data Visualization Do you simply want to collect data, or do you want to derive business insights from it? What if you could quickly and...
- Enable secure remote access to 3D data without sacrificing visual perfomance Design and manufacturing companies must adapt quickly to the demands of an increasingly global and competitive economy. To speed time to market for...
- What should I look for in a Next Generation Firewall? SANS Provides Guidance With so many vendors claiming to have a Next Generation Firewall (NGFW), it can be difficult to tell what makes each one different....
- Why Are Customers Really Deploying an NGFW? It seems every IT Security expert is talking about the NGFW, but what are people really doing? This webcast covers 5 real-world customer... All IT Industry White Papers | Webcasts