Tags: US | Earns | AT&T

AT&T Earnings Jump 26 Percent, Driven by Wireless

Thursday, 28 Jan 2010 11:36 AM

Maybe AT&T's new slogan should be "More books in more places."

The phone company added a near-record 2.7 million wireless customers in the last quarter, defying expectations with the help of new e-reading devices.

AT&T said Thursday it added 1 million non-phone devices with built-in cellular service in the fourth quarter. AT&T has deals to support the latest version of Amazon.com Inc.'s Kindle, Sony Corp.'s Reader and Barnes & Noble Inc.'s Nook.

AT&T also said it activated 3.1 million iPhones, the second-highest quarterly total so far, demonstrating the continuing allure of the Apple Inc.'s phone.

AT&T achieved that number despite the lack of a new iPhone model in the quarter, and in the face of an aggressive ad campaign by Verizon Wireless. Complaints about dropped calls and poor service in some areas didn't dissuade buyers either.

AT&T's 2.7 million new wireless customers exceeded the 2.2 million that Verizon Wireless signed in the same period.

However, AT&T added just 910,000 customers under contract, compared to 1.2 million at Verizon. Customers on contracts pay far more than others. In particular, AT&T probably gets relatively little revenue from each e-reader device.

Even so, AT&T is taking clear leadership in providing service for non-phone devices, which are seen as the next big growth area for wireless.

The country's largest telecommunications provider earned $3 billion, or 51 cents per share, in the last three months of the year. That was up 26 percent from a year earlier, and matched the average analyst expectation as polled by Thomson Reuters.

Revenue fell 0.7 percent to $30.9 billion, also matching expectations.

AT&T is the sole U.S. carrier for Apple's iPhone. The companies haven't said how long their contract lasts, but Apple appeared to reaffirm its commitment to AT&T on Wednesday, when it announced that AT&T will be the sole U.S. data provider for its new tablet-style computer, the iPad.

Analyst Christopher King at Stifel Nicolaus said it was unclear what motivated Apple to stay with AT&T. King said the decision did not necessarily preclude the possibility that the iPhone could come out with another carrier, like Verizon, later in the year.

AT&T shares rose 18 cents to $25.80 in morning trading.

For the full year, AT&T earned $12.5 billion, or $2.12 per share, on revenue of $123 billion. That compared to 2008 earnings of $12.9 billion, or $2.16 per share, on revenue of $124 billion.

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Maybe AT T's new slogan should be More books in more places. The phone company added a near-record 2.7 million wireless customers in the last quarter, defying expectations with the help of new e-reading devices.AT T said Thursday it added 1 million non-phone devices...
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