AT&T’s performance was mixed when it came to consensus estimates from Wall Street, which had predicted earnings per share of $0.46, with revenue of $32.2 billion in revenue for the quarter. The telecom’s postpaid subscriber base now covers 107 million customers, a net increase of 1.1 million subscribers from the previous quarter. EPS was up 10% from $0.40 in the year ago quarter, and revenue also grew (if only a little) from the $32.5 billion reported in Q4 2011.
The real standout metric here is AT&T’s smartphone sales, which were the highest the company has ever recorded for a quarter. It pre-announced that it had crossed the 10 million threshold for device sales this quarter, in fact, so we knew that it was a big quarter in this regard, but now we get a clearer picture of exactly how big. Those smartphone sales included record highs for both iPhone and Android-powered smartphones, AT&T said.
Still, AT&T cautioned investors in advance that Superstorm Sandy, and higher than expected smartphone costs, likely related to its initial outlay for the iPhone 5, would put a damper on results, It also gave a heads up about the $10 billion charge it noted pertaining to its pension plan.
As I’ve noted, AT&T activated 8.6 million iPhones, but as usual didn’t break out actual sales numbers. That move stands in stark contrast to Verizon, which announced earlier this week that it sold a total of 6.2 million. AT&T is still Apple’s number one driver of device sales, despite the fact that its monopoly on the iPhone ended years ago.
Turning briefly to AT&T’s wireless business, the Dallas-based telecommunications giant didn’t fare quite as well. Overall wireline revenues were $14.9 billion, down very slightly year-over-year, though operating income did lift a bit to $1.8 billion. AT&T also had a strong quarter when it came to roping in new home services customers — 192,000 subscribers signed up for AT&T’s U-verse TV service, while the company’s U-verse High Speed Internet picked up 609,000 new subscribers, making for a total of 7.7 million. Most importantly though is that revenue from these residential customers was up 3% from the year-ago quarter, a level of growth that AT&T notes is the strongest they’ve seen in four years.
Additional reporting by Chris Velazco