Sam OliverWith $0.54 earnings per share reported, AT&T stock fell from $0.63 earnings a year prior. The company's overall revenue fell less than a percent to $30.7 billion.
More than 2.4 million iPhones were activated in the quarter, with more than a third of those new customers.
In all, AT&T gained 1.4 million wireless subscribers. Its total number of customers sits at 79.6 million, which is 6.7 million higher than last year.
The iPhone helped AT&T reach a 3.5 million user increase in devices with 3G capabilities. That resulted in the carrier seeing a 37.2 percent increase in wireless data revenues, including Internet access and text messaging, totaling $3.4 billion. That's more than double the total for 2Q 2007.
"Our wireless momentum is excellent, operational execution and cost management continue to be strong, and in a challenging economy we delivered solid results," said Randall Stephenson, AT&T chairman and chief executive officer.
Net income was $3.2 billion, down from the $3.8 billion a year prior, due partially to the increased operating expenses associated with subsidizing the sale of the iPhone.
"Increased operating expenses in the second quarter of 2009, in part, reflect volume-based acquisition costs associated with the success of the iPhone 3GS launch, which started June 19," a statement from the company reads. "AT&€™s iPhone customer characteristics are attractive, with (average revenue per user) significantly higher than and churn rates well below the company’s postpaid averages; as a result, robust iPhone demand drives strong recurring revenues and substantial long-term value."
When the iPhone 3GS launched on June 19, it was the best sales day ever for the company's retail locations and Web site.
Despite the initial investment on the part of AT&T in iPhone customers, the company said it remains confident that those consumers will bolster the company in the future.
"AT&T iPhone subscribers, both new customers and upgrades, take two-year contracts with data packages," the company said. "As a result, robust iPhone demand drives strong recurring revenues and substantial long-term value."
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27 Comments
Isnt iPhone the real hearo for AT&T?.
They do flatter themselves a bit much, don't they? Unless this is a hint that they know the exclusive contract goes out for years to come.
Yeah right. They subsidy the iPhone just like they do with any other device, and No they don't lose a freggin dime, matter fact they only Pony up $100 or less for each iPhone that they subsidy, They pony up 2x as much for the HTC Fuze, So no they're not fooling anyone here.
Yeah right. They subsidy the iPhone just like they do with any other device, and No they don't lose a freggin dime, matter fact they only Pony up $100 or less for each iPhone that they subsidy, They pony up 2x as much for the HTC Fuze, So no they're not fooling anyone here.
I was thinking the same thing. They subsidized the 3G last year so how can their year over year be worse? There have been cost breakdowns of the parts and the 3G and 3GS were very close. I guess the only catch could be Apple charging more for the R&D needed but I have my doubts there.
I was thinking the same thing. They subsidized the 3G last year so how can their year over year be worse? There have been cost breakdowns of the parts and the 3G and 3GS were very close. I guess the only catch could be Apple charging more for the R&D needed but I have my doubts there.
The 3G didn't come out until July so no 3G subsidies were in the quarter a year ago. In fact, the 2G had it's subsidies in the monthly fees and not upfront like for the 3G and 3GS.
Still, AT&T earned billions in the quarter. I just wish they would pour more investment into their infrastructure (their service sucks in my area) and not pat themselves on the back for "cost containment". I dropped my iPhone service last month because I was fed up with AT&T.
I'm hoping Apple drops the exclusive and starts offering us consumers a choice of carriers. Both companies are making too much money to feel any real pressure to do what is right for consumers so I don't expect any changes. But, it sucks for me that I turned my iPhone 3G into an iPod Touch and have to carry a separate cell phone from a company that has a better network.