AT&T profits decline 10% as smartphones fly off the shelves

AT&T Inc. (T) added 1.1 million subscribers during the last quarter, bringing its total to 98.6 million customers. The carrier reported $3.6 billion in net income on revenues of $31.5 billion. Profits are down 10% from the year-ago period, but revenues are up 2.2%.
The carrier, which is pressing ahead with plans to acquire T-Mobile USA Inc. (DTEGY) to become the largest carrier in the country, reported 9.5% growth in wireless revenues. Data revenues jumped 23.4% from the previous year.
The second quarter also marked its best ever for smartphone sales at 5.6 million units — nearly 70% of all postpaid device sales were smartphones. The carrier activated 3.6 million iPhones during the quarter and 24% of that number was comprised of new subscribers to AT&T. Android sales doubled year over year, representing more than 40% of all smartphone sales during the quarter. Nearly half, or 49.9% of AT&T’s 68.4 million postpaid subscribers had smartphones at the end of the quarter.
Average revenue per user (ARPU) climbed 2% to $63.87 for postpaid subscribers, marking the tenth consecutive quarter or ARPU increases.
The carrier added 331,000 postpaid customers, 137,000 prepaid customers, 379,000 connected devices and 248,000 net customers were added by resellers. Churn was up slightly at 1.43% from 1.29% percent in the year-ago period.
“We delivered another strong quarter capping a solid first half of the year,” CEO and chairman Randall Stephenson said in a prepared statement.
“Mobile broadband with IP infrastructure and cloud services are transforming our industry and are creating unprecedented opportunity. AT&T is strongly positioned to lead in this new era,” he added. “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.”