24 Jul 2012
US operator AT&T reported a 10 percent rise in earnings in Q2 on the back of growing wireless margins and strong smartphone sales.
Net income for the period came in at US$3.9 billion (US$0.66 per diluted share), up from US$3.6 billion (US$0.60 per share) in the year-earlier quarter. Revenues remained stable at US$31.6 billion, up 0.3 percent.
Analysts polled by Thomson Reuters had forecast earnings of US$0.63 per share on revenue of US$31.7 billion.
On the wireless side, AT&T’s operating income margin was 30.3 percent versus 26.9 percent a year ago. It attributed this “best ever” margin performance to “improved operating efficiencies, fewer handset upgrades and further revenue gains from the company’s 43 million high-value smartphone subscribers.”
Other highlights in wireless included a US$1 billion increase in data revenue, up 18.8 percent to US$6.4 billion, and “record low levels of churn” in both the prepaid and postpaid segments. Total churn was 1.18 percent versus 1.43 percent in Q2 2011 and 1.47 percent in Q1 2012.
Total wireless revenues (including equipment sales) were up 4.8 percent year-on-year to US$16.4 billion, accounting for just over half of the group total. Fixed-line revenues were down 0.8 percent to US$14.9 billion.
AT&T posted a net increase in total mobile subscribers of 1.3 million in the quarter to reach 105.2 million in total. This included postpaid net adds of 320,000; prepaid net adds of 92,000; connected device net adds of 382,000 and reseller net adds of 472,000.
The operator sold 5.1 million smartphones in the period, representing 77 percent of postpaid device sales. At the end of the quarter, 61.9 percent (43.1 million) of AT&T’s postpaid subscribers had smartphones, up from 49.9 percent (34.1 million) a year earlier.
The smartphone total included 3.7 million iPhone activations, with 22 percent going to new customers.
