AT&T: The iPhone Was Good, But Not Good Enough To Hold Off A Q4 Loss
A set of quarterly results today from AT&T (NYSE: T) that underscored some of the aftershocks the carrier is feeling in the wake of its failed bid to buy T-Mobile USA. The carrier swung to a loss and failed to meet analysts’ estimates on earnings, partly down to a $4 billion charge it took for ending negotiations with Deutsche Telekom (NYSE: DT), after meeting what appeared to be insurmountable regulatory opposition to the deal.
The $4 billion charge—$3 billion in fees and $1 billion in wireless spectrum to T-Mobile USA—put a big dampener the quarter, which otherwise saw big gains in what the carrier refers to as its “growth engines”: wireless services and specifically those around smartphones; wireline data, including its U-verse TV service; and business services.
SEE ALSO: Verizon Moved 4.2 Million iPhones In Q4 But Costs Higher Than Expected
Overall revenues were $32.5 billion for the quarter, coming in above analyst estimates according to a poll from Yahoo. Excluding the charges, earnings per share were $0.42, which missed average analysts’ estimates of $0.43. The total net loss for the quarter was $6.63 billion.
iPhone juggernaut. It’s been a year since AT&T lost its exclusive grip on the iPhone in the U.S. but such is the power of the Apple (NSDQ: AAPL) brand in wireless right now, and AT&T’s continuing hold on its original iPhone customers, that the carrier nevertheless continues to get great dividends out of its association with it. AT&T said that it made 7.6 million iPhone activations for the quarter, with overall smartphone sales totaling 9.4 million devices.
AT&T didn’t spell out exactly how many iPhones it sold of those activated—and indeed some could have been bought directly from Apple unlocked. But if you assume that most would have been bought directly via AT&T, that works out to AT&T accounting for some 20 percent of the 37 million iPhones Apple sold in the last quarter, and iPhone accounting for some 80 percent of AT&T’s smartphone sales.
It also shows that despite some of the negative press that AT&T has faced over the quality of its wireless data network, it is still holding on to its customers over competitors Verizon and Sprint (NYSE: S). In its earnings earlier this week, Verizon noted that it had sold 7.7 million smartphones and seen 4.3 million iPhone activations in the quarter.
Correspondingly, AT&T said it saw a 10 percent growth in wireless revenues to $16.7 billion. Wireless data revenue growth is outstripping that of mobile revenues overall: it was $5.9 billion, up nearly 20 percent on a year ago, which AT&T says was driven by internet access, app usage and messaging.
AT&T’s fixed digital content play isn’t doing so bad, either. Revenues for its U-verse high-speed broadband and TV service were up by almost 44 percent over a year ago, and partly offset declines in DSL. Still not by enough: total revenues for wireline services were down by 1.4 percent to $14.9 billion.
AT&T does not break out tablets as an individual category and instead groups them with other non-phone “branded computing devices” like aircards. It said it had its best-ever quarter for the category, with sales of 571,000 with total subscribers now numbering 5.1 million, a rise of 70 percent.
Posted In: Gadgets, Tablets, Legal, Regulatory, Media & Publishing, TV, Mobile, Money, Earnings, Technologies / Formats, Broadband, Companies, Apple, iPhone, AT&T, Sprint, T-Mobile, Verizon

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