AT&T Inc's second-quarter profit and revenue beat Wall Street estimates and it added more subscribers than expected despite the loss of exclusive US rights to sell Apple Inc's iPhone.
The No. 2 US mobile provider, which is seeking approval to buy T-Mobile USA for $39 billion, added 331,000 net subscribers in the quarter, compared with the average expectation for 91,000 from seven analysts contacted by Reuters.
"The net (subscriber) additions were surprisingly strong," said Mizuho analyst Michael Nelson. "It seems like AT&T really successfully defended its turf after losing iPhone exclusivity."
AT&T shares were up 12 cents at $30.35 on Thursday morning. Nelson noted that the strong results could be overshadowed by investor concern about growing opposition to AT&T's controversial plan to buy T-Mobile USA.
US Sen. Herb Kohl, chairman of the Senate's antitrust subcommittee, urged regulators on Wednesday to block the deal and other lawmakers also expressed concern. The deal would cost AT&T about $6 billion in break-up fees if it is rejected.
AT&T said on Thursday that it still expects the deal to close in the first quarter of 2012 and that US regulators reviewing the transaction are "asking the questions you would expect."
Its results came a day before its bigger rival Verizon Wireless - a venture of Verizon Commun-ications and Vodafone Group Plc - was slated to release quarterly results. In the first quarter of this year, Verizon Wireless started selling iPhone, ending more than three years of AT&T's exclusive rights to sell the device in the United States. While Verizon is expected to add about three times more subscribers than AT&T this quarter as a result, AT&T fared better than expected.
AT&T said iPhone was still its strongest-selling smartphone despite the Verizon competition.
One wrinkle in the results appeared to be slower than expected sales of connected devices which include the Amazon.com Kindle e-reader. AT&T's 379,000 net additions of connected devices was well below an estimate for 750,000 from Pacific Crest analyst Steve Clement.
AT&T's net profit fell to $3.59 billion, or 60 cents per share, from $4 billion or 67 cents per share a year earlier and compared with analyst expectations for earnings of 59 cents per share, according to Thomson Reuters I/B/E/S. Excluding a Telmex Internacional transaction in the year-ago quarter, AT&T said earnings would have been flat. Revenue rose 2.2 percent to $31.5 billion, compared with Wall Street expectations for $31.3 billion, according to Thomson Reuters I/B/E/S.
Comments
Comments are closed.