AT&T Earnings Show Smartphone Success Despite a Net Loss
AT&T (NYSE:T) beat analysts’ revenue expectations, thanks in large part to Apple’s (NASDAQ:AAPL) iPhone 4S. The telecom company’s earnings of $32.5 billion topped analysts estimates of $32 billion, an 3.6 percent increase from the same period last year.
AT&T saw its best quarter ever of smartphone sales, selling 9.4 million devices, showing a 50 percent spike on its previous quarterly record.
The company also had a record quarter of both iPhone and Google (NASDAQ:GOOG) Android phone activations, with AT&T activating a whopping 7.6 million iPhones, compared to a mere 2.7 million in the third quarter.
“We had a tremendous year in terms of execution, and we have excellent momentum across our growth platforms,” said Randall Stephenson, AT&T chairman and CEO. “This was a blowout quarter for smartphone sales.”
Despite record sales and activations, AT&T reported a net loss of $6.7 billion for the quarter, a loss of $1.12 per share. These losses are due to charges related to the loss of benefit plans, impairments, and a one-time $4 billion charge connected to the termination of the T-Mobile merger. Putting these items aside plus a one-time 3 cent gain from a tax settlement, AT&T earned 42 cents a share, down from 55 cents a share in the year-earlier quarter. Analysts surveyed byThomson Reuters were looking for earnings of 43 cents a share.
AT&T still managed to win big in the wireless word, with 717,000 wireless postpaid net adds, and an additional 2.5 million net wireless subscribers.
Investors pushed down AT&T’s shares 51 cents, or 1.7%, to $29.70 in pre-market trading.
Verizon (NYSE:VZ) also fell below analysts’ earnings estimates with its fourth-quarter results, disclosed earlier this week, but showed strong revenue growth.