AT&T profit up slightly on flat sales

Declines in wireline voice revenue offset mobile and broadband subscriber gains

AT&T reported revenue of $31.5 billion for the third quarter of this year, flat compared to the third quarter of 2011, while net income was up slightly to $3.6 billion.

Revenue in AT&T's wireless division grew 6.6% to $16.6 billion but gains there were offset by lower revenue in its wireline division. Voice wireline revenue dropped 10.8% from a year ago, from $6.2 billion to $5.7 billion, the company said in a press release.

Excluding numbers from AT&T's advertising solutions business unit, which it sold earlier this year, the company's revenue grew 2.6%. Earnings per share were $0.63, beating analyst expectations of $0.60.

Net income attributable to AT&T was up 0.3%.

The company had strong smartphone sales and is ahead of schedule for its 4G LTE network construction, Randall Stephenson, AT&T's chairman and CEO, said in a statement.

The company has delivered a "solid performance this year, even in a challenging economy," John Stephens, AT&T's CFO, said during a conference call.

AT&T's wireless division reported a 4.5% increase, to $14.9 billion, in wireless service revenue. Wireless data revenue increased by more than $1 billion -- 18.3% -- from the third quarter of 2011.

The company sold 6.1 million smartphones in the third quarter, representing 81% of postpaid device sales. During the quarter, AT&T activated 4.7 million Apple iPhones, with 18% of those customers new to AT&T. Nearly 64 percent of AT&T mobile customers now have smartphones, up from 53% a year earlier.

Smartphone sales were driven by the iPhone 5, available during the last 10 days of the quarter, noted Ralph de la Vega, president and CEO of AT&T Mobility. The company had large numbers of current customers buying the new iPhone during that time, he said.

"Our customer base is loyal to AT&T and staying loyal to AT&T," he said.

AT&T reported a net increase of 678,000 in total mobile subscribers in the third quarter.

In its wireline division, AT&T reported revenue of $14.8 billion, down 1.6% from a year ago.

Including DSL subscriber losses, AT&T wireline broadband connections decreased by 42,000.

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

Copyright © 2012 IDG Communications, Inc.

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