AT&T Posts Strong Earnings, iPhone Activations Drop 43% from Previous Quarter
April 24, 2012 1:18 PM
comment(s) - last by
The news is mostly good for America's second largest carrier, despite Apple's misfortune
AT&T, Inc. (
) ended 2011 on a high note. Despite the
loss of its bid to take over
the nation's fourth largest carrier, T-Mobile USA (a Deutsche Telekom AG (
at the hands
U.S. Department of Justice
, AT&T's fourth quarter
earnings beat estimates
on strong sales of the Apple, Inc. (
I. AT&T Posts Bullish Profit, But Stagnate Phone Subscriber Figures
Now it's delivered
another blockbuster quarter
, hinting that the failed deal will not stymie the carrier's bid for market dominance. Revenue checked in at $31.8B USD, squarely in line with the $31.85B USD analyst consensus, but profits handily beat estimates, coming in at $0.60 USD/share (versus a consensus of $0.573 USD/share).
The profit win represents a 4.7 percent surge over the analyst estimates and a 5.3 percent rise from Q1 2011. As if that wasn't enough good news, AT&T added 726,000 wireless service subscribers (about the same number that
T-Mobile recently lost
), taking its total to 103.9m subscribers up from 103.2m in Q4 2011.
AT&T posted a strong profit, but failed to grow its cellular phone subscribers.
[Image Source: Reuters/Shannon Stapleton]
AT&T and rival Verizon Wireless -- a joint venture between Verizon Communications Inc. (
) and Vodafone Group Plc. (
) remain far ahead of third-place Sprint Nextel Corp (S) and fourth place T-Mobile USA. Together, AT&T and Verizon control over two-thirds of American wireless subscribers.
The only trouble spot in AT&T's earnings came on the cellular front. While its wireless contracts grew (see above), the numbers were a bit deceptive as only 187,000 of those new subscribers were postpaid (cell phone or tablet) and nearly all of those customers were tablet plan subscribers.
In other words AT&T added no actual
customers, versus Verizon Wireless, who added 501,000 new plan customers in Q1 2012. Verizon Wireless has 88m post-paid customers, while AT&T has 69.5m post-paid subscribers.
II. It's Sophomore Slumpsville for iPhone 4S's Second Quarter
AT&T, the original carrier of Apple iPhone, did outsell Verizon Wireless in iPhones, posting 4.3 million activations vs. 3.2m activations. The numbers are good news for AT&T, but bad news for Apple, hinting at a lackluster quarter and sharp drop in iPhone 4S sales after a
record setting holiday quarter
While iPhone sales are still up on a year-to-year basis, they are unquestionably a letdown for the company, which has grown accustomed to beating sales on both a consecutive quarter and year-to-year basis. They hint that Apple's
revived ambitions to challenge Android
for market dominance may have been short-lived. The weaker sales hit Apple's stock this morning, putting on hold its bid to become the first company with a $1T USD market cap.
iPhone 4S sales have failed to sustain their early sprint. [Image Source: The Tech Journal]
In the good news department AT&T recently earned high praise from
as the "best" 4G carrier. The publication raised an interesting point, in that
AT&T's HSPA+ 3G network
-- much faster than Verizon's CDMA 3G -- makes service less painful when a fast LTE (4G) connection drops out.
In January AT&T switched on a number of new cities -- New York City, NY; San Francisco, CA; Oakland, CA; Los Angeles, CA; San Diego, CA; San Jose, CA; Austin, TX; Phoenix, AZ; Raleigh, NC; Chapel Hill, NC; Orlando, FL -- bringing its total LTE coverage to 26 markets and 76m Americans.
Since then it's picked up the pace, adding more cities, including
Tampa/St. Petersburg, FL
Staten Island, NY
St. Louis, MO
AT&T reports that approximately 30 percent of its contract customers now have LTE-capable smartphones.
AT&T is trying to remain diverse, pushing new entrants like
the Lumia 900 LTE
from Nokia Oyj. (
), a Windows Phone handset which launched Easter weekend, in what AT&T called its
most important market launch
The service provider also continues to quietly grow its cable TV and internet offerings. Its Uverse branded services are up to 6 million internet and 4 million TV subscribers, although availability remains limited to certain markets.
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are you embarassed yet?
4/24/2012 9:56:08 PM
I just wondered if you can recognize your own bias in reporting this"news"?
Any one who has taken even a short look at Apples financials over the last ten years knows that Apple sales go down in the second quarter. Why did you ignore the yoy comparison that is commonly used to counter this bias? Could you perhaps be less then objective in your views of Apple and global warming?
I seem to remember several articles about how Android was destroying the iPhone in all market share numbers. Did you notice how the iPhone is dominating Android at ATT?
I will leave Global warming out because it seems to make grown men act like kids. Maybe you really are just feeling the scientists dont know what they are doing. I am no cap and trade flaming liberal. I would rather people get fed before money is set aside to combat global warming.
Objectivity is not a journalistic value because it makes people feel warm and fuzzy. It is a value because it keeps journalists from eating crow. The really scary journalists are he ones who can't even taste it when they are eating it.
"If a man really wants to make a million dollars, the best way would be to start his own religion." -- Scientology founder L. Ron. Hubbard
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