AT&T experienced a 10 percent drop in profits for its second quarter of 2011 despite a rise in smartphone sales-both Apple iPhone and Android-based devices.
AT&T saw a
dip in its second-quarter profits despite registering more wireless
subscriptions than anticipated and experiencing an overall boost in smartphone
users, including Apple iPhone and Google Android users.
quarter ended June 30, AT&T's revenue totaled $31.5 billion, up more
than $680 million, or 2.2 percent, versus the year-earlier quarter.
However, the company's second-quarter 2011 net income totaled
$3.6 billion, which-compared with net income of $4 billion for the
second quarter of 2010-marks a decrease of 10 percent.
delivered another strong quarter, capping a solid first half of the year,"
, AT&T chairman and chief executive officer, said in a
statement. "Mobile broadband growth continues to be robust, and we are
seeing encouraging signs in wireline revenue. This adds to our confidence as we
continued strong performance in mobile broadband in the second quarter,
AT&T delivered solid growth in its wireless
business, including strong revenue growth, record second-quarter smartphone
gains and strong net adds, including postpaid and branded computing devices.
videotaped statement, John Stephens, senior executive vice president and chief
financial officer at AT&T, said, "We're real pleased about our growth in
wireless and our growth in that. And we're pleased from a number of different
areas. First and foremost, we added over 1 million customers this quarter. We
had very solid performance for customer additions. And we had positive customer
gains in all of our categories, whether they be postpaid, reseller, wholesale
or connected devices." Stephens added that the mobile data business is "expanding
posted a net gain in total wireless subscribers of 1.1 million, to reach
98.6 million in service, the company reported. This included gains in
every customer category. Net adds for the quarter include postpaid net adds of
331,000. Excluding the impacts of the Alltel and Centennial integration
migrations, postpaid net adds were 504,000. Prepaid net adds were 137,000,
connected device net adds were 379,000 and reseller net adds were 248,000.
Second-quarter net adds reflect adoption of smartphones, increases in prepaid
subscribers and sales of tablets and connected devices such as automobile-monitoring
systems, security systems and a host of other products.
broadband with IP infrastructure and cloud services are transforming our
industry and are creating unprecedented opportunity," AT&T's CEO Stephenson
said in a statement. "AT&T is strongly positioned to lead in this new era.
Our planned acquisition of T-Mobile USA will accelerate development of
next-generation capabilities, and it will lay the groundwork for continued
high-tech innovation for years to come."
During a July
21 call with analysts announcing the company's Q2 earnings, AT&T officials
said they expect the acquisition of T-Mobile to close in the first quarter of
2011, despite the deal having run into an extended Federal Communications
Commission review and opposition from a high-ranking Senate Democrat.
delivered robust smartphone sales. In the second quarter, 5.6 million
smartphones were sold, a second-quarter record and the third-highest quarter
ever, AT&T said. Smartphone sales also increased more than 43 percent
year-over-year. Sales of non-iPhone smartphones more than doubled year-over-year.
Nearly 70 percent of postpaid device sales were smartphones. During the
quarter, 3.6 million iPhones
were activated, the company said.
Stephens said AT&T sold about 2.3 million non-iPhone smartphones-primarily
Android-based phones-during the quarter.
AT&T had a record quarter with branded computing subscribers, a new growth
area for the company that includes tablets
aircards, MiFi devices, tethering plans and other data-only devices, the
company said. AT&T added 545,000 of these devices to reach
4.0 million, nearly twice as many in service as a year ago. Most of those
new subscribers were tablets, with 377,000 added in the quarter, of which
30 percent were postpaid, company officials said.
And at the end
of the quarter, 49.9 percent of AT&T's 68.4 million postpaid
subscribers had smartphones, up from 35.8 percent a year earlier, the
total wireless revenue, which includes equipment sales, rose 9.5 percent
year-over-year to $15.6 billion. Wireless service revenue increased
7.4 percent, to $14.2 billion, in the second quarter.
wireless data revenue-driven by Internet access, access to applications,
messaging and related services-increased more than $1 billion, or
23.4 percent, from the year-earlier quarter to $5.4 billion, AT&T
reported. And AT&T's postpaid wireless subscribers on monthly data plans
increased by 19.5 percent over the past year. Versus the year-earlier
quarter, total text messages carried on the AT&T
increased by 24 percent to 190.8 billion, and
multimedia messages increased by 54 percent to 4.0 billion.
strength in IP data services, revenue from residential wireline customers
totaled $5.4 billion in the second quarter, AT&T said. Compared with
the second quarter of 2010, consumer wireline revenue increased
0.1 percent, the company said.
varied demand from customers, AT&T
added 202,000 subscribers to reach 3.4 million in
service, the company said. In the second quarter, the AT&T U-verse High
Speed Internet attach rate continued to run above 90 percent and
55 percent of new subscribers took AT&T U-verse Voice. AT&T's
U-verse deployment now reaches 29 million living units.
U-verse High Speed Internet delivered a second-quarter gain of 439,000
subscribers to reach a total of 4.1 million, helping offset losses from DSL,
AT&T reported. At the end of the second quarter, AT&T had 16.5 million
total wired consumer broadband connections, up 3.3 percent over the past
year and down slightly from first-quarter 2011 levels, largely due to
seasonality, the company said.
AT&T saw a drop in revenue from business customers. Total business revenues
were $9.3 billion, declining 0.3 percent sequentially and down
4.1 percent versus the year-earlier quarter, AT&T reported. The
year-over-year decline reflects economic weakness in voice and legacy data
products somewhat offset by growth in IP data, AT&T officials said.