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AT&T revenue flat, net income up slightly

Declines in wireline voice revenue offset mobile and broadband subscriber gains

AT&T reported revenue of US $31.5 billion for the third quarter of this year, flat compared to the third quarter of 2011, while net income was up slightly to $3.6 billion.

Revenue in AT&T's wireless division grew 6.6 percent to $16.6 billion but gains there were offset by lower revenue in its wireline division. Voice wireline revenue dropped 10.8 percent from a year ago, from $6.2 billion to $5.7 billion, the company said in a press release.

Excluding numbers from AT&T's advertising solutions business unit, which it sold earlier this year, the company's revenue grew 2.6 percent. Earnings per share were $0.63, beating analyst expectations of $0.60.

Net income attributable to AT&T was up 0.3 percent.

The company had strong smartphone sales and is ahead of schedule for its 4G LTE network construction, Randall Stephenson, AT&T's chairman and CEO, said in a statement.

The company has delivered a "solid performance this year, even in a challenging economy," John Stephens, AT&T's CFO, said during a conference call.

AT&T's wireless division reported a 4.5 percent increase, to $14.9 billion, in wireless service revenue. Wireless data revenue increased by more than $1 billion -- 18.3 percent -- from the third quarter of 2011.

The company sold 6.1 million smartphones in the third quarter, representing 81 percent of postpaid device sales. During the quarter, AT&T activated 4.7 million Apple iPhones, with 18 percent of those customers new to AT&T. Nearly 64 percent of AT&T mobile customers now have smartphones, up from 53 percent a year earlier.

Smartphone sales were driven by the iPhone 5, available during the last 10 days of the quarter, noted Ralph de la Vega, president and CEO of AT&T Mobility. The company had large numbers of current customers buying the new iPhone during that time, he said.

"Our customer base is loyal to AT&T and staying loyal to AT&T," he said.

AT&T reported a net increase of 678,000 in total mobile subscribers in the third quarter to reach 105.9 million.

In its wireline division, AT&T reported revenue of $14.8 billion, down 1.6 percent from a year ago. Revenue from residential customers was $5.4 billion, up 2 percent from the third quarter of 2011. That was AT&T's largest growth in consumer revenue in more than four years, the company said.

The company reported a 17.9 percent year-over-year growth in IP revenues from residential customers, including broadband, U-verse TV and U-verse Voice service.

Total AT&T's U-verse subscribers, including TV and broadband, reached 7.4 million during the quarter. U-verse TV added 198,000 subscribers to reach 4.3 million, and U-verse broadband gained 613,000 subscribers to reach 7.1 million.

"We continue to add [U-verse] subscribers at a rapid clip," Stephens said.

Including DSL subscriber losses, AT&T wireline broadband connections decreased by 42,000.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is [email protected]


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