AT&T (NYSE: T), the US's largest telecoms company reported today Q3 net income of $3.2 billion, or 55 cents a share, on revenue of $31.3 billion. This compares to last year's Q3 profit of $3.06 billion, or 50 cents a share. It reported adjusted earnings of 67 cents a share, falling short of the 71 cents a share estimate from a *Thomson Reuters* poll of analysts. But the adjusted EPS includes 10 cents for *Apple* iPhone subsidies--or what AT&T called "pressure generated by strong performance from the Apple (NSDQ: AAPL) iPhone 3G initiative".
AT&T CEO Randall Stephenson had nothing but praise for the iPhone, saying in a statement he was "particularly pleased" with the customer response. The iPhone helped drive customer acquisitions, as well as boost revenues at the wireless unit, which saw a 15.4 percent growth in revenues. AT&T's total wireless revenues came in at $12.6 billion, and wireless service revenues, which exclude handset and accessory sales, grew 14.3 percent to $11.3 billion. Retail postpaid subscriber ARPU was $58.99, up 2.6 percent versus the year-earlier third quarter. Iphone 3G activations totaled 2.4 million in the quarter, with approximately 40 percent of them new customers for the operators. The iPhone was also delivering a better class of subscribers--"high value" ones with "significantly higher ARPU and lower churn than postpaid subscriber average." iPhone ARPU was 1.6 times higher, coming it at $95 compared to $58.99 for non iPhone users. AT&T expects its dilution associated with the iPhone 3G to "run above its previous expectation....more on MocoNews.
By Dianne See Morrison