AT&T reported revenue of US$31.5 billion for the second quarter of 2011, up 2.2 percent from the same quarter in 2010, but net income dropped due to increased operational and support costs.
New mobile data customers drove the growth in revenue. AT&T added 5.6 million smartphones to its mobile network during the quarter, a record for smartphone additions in a second quarter and the third highest quarter ever for the company.
The telecom carrier also added a record 545,000 branded computing subscribers -- people using tablets, tethering plans, mobile Wi-Fi routers and other data-only devices -- with most of the growth from tablets, the company said.
Much of the smartphone growth came from Apple's iPhone, with 3.6 million of the devices added to AT&T's network. About 24 percent of those iPhone users were new to AT&T.
The company now has 98.6 million mobile subscribers, up 1.1 million during the quarter, and 4 million branded computing subscribers, AT&T said.
AT&T reported net income of $3.6 billion during the second quarter, which ended June 30. Earnings per share was $0.60, meeting analyst expectations, according to Yahoo Finance. Net income was down from $4 billion in the second quarter of 2010.
Operating expenses were up by more than $600 million from a year earlier, due to increased operational and support costs in the mobile division. Earnings per share for the second quarter of 2011 matched the earnings from a year earlier, excluding AT&T's sale of stock in Telmex Internacional, the company said.
Increased expenses were largely related to recovery costs from storms in Missouri in May and to integration costs from AT&T's purchase of parts of Alltel's mobile network in June 2010, company officials said.
Mobile broadband growth was "robust" during the quarter, Randall Stephenson, AT&T's chairman and CEO, said in a statement.
"Wireless continues to exceed expectations," John Stephens, AT&T's CFO, said during a briefing. "We had a solid quarter that adds to our confidence as we head into the second half [of 2011]."
Mobile revenue grew 9.5 percent to $15.6 billion from a year earlier. Mobile data revenue grew by $1 billion, a 23.4 percent increase, from a year earlier, AT&T said.
AT&T also reported positive numbers for its residential wireline division, with revenue from residential customers up 0.1 percent to $5.4 billion. That growth was driven by broadband additions, the company said.
AT&T U-verse TV service added 202,000 subscribers during the quarter. The service now has 3.4 million customers. The company's U-verse broadband service added 439,000 customers during the quarter to reach 4.1 million. The company now has 16.5 million broadband customers, including DSL subscribers, down slightly from the first quarter due to seasonal trends, the company said.
Consumer IP revenue now represents 49.2 percent of AT&T's wireline consumer revenue, up from 40.4 percent in the second quarter of 2010.
Total consumer wireline connections were 42.5 million at the end of the quarter, down from 43.1 million at the end of the first quarter. The decline is due to declines in traditional telephone customers, a long-time trend among major telecom carriers.
Total wireline revenue was $14.9 billion in the second quarter, down 3.2 percent from a year earlier.