AT&T Posts Q4 Loss, But iPhone Sales A Bright Spot
A record number of iPhone sales -- 7.6 million -- helped AT&T's fourth-quarter revenue rise nearly 4 percent to $32.5 billion from the year-earlier quarter. That number, however could not offset the impact of AT&T’s failed T-Mobile merger plan: AT&T reported a net income loss of $6.7 billion, of which $4 billion was attributed to that deal's failure.
The iPhone sales figures were impressive in light of increased competition from other carriers, most notably industry behemoth Verizon.
"We came out of 2011 with each of our key growth platforms, mobile broadband, strategic business services and U-verse, all growing at strong double digits. That means better than three-quarters of our total revenues now come from wireless data and managed services and those have a combined growth rate above 7 percent. We had really strong mobile sales throughout the year. In fact, we had a blowout holiday season. And in the fourth quarter, we sold 9.4 million smartphones; that's 50 percent above our previous record," said Randall Stephenson, AT&T chairman CEO, during a conference call. "In the year when our competitors began selling the iPhone, we outsold them in every single quarter."
IPhones have given the mobile cell sector a boost in general: Verizon on Wednesday reported record revenue and said that it had sold 4.2 million iPhones and 7.7 million smartphones during the same period. However, Verizon added more contract subscribers in that time frame, and its total subscriber base of 108.5 million is still 5.5 million greater than AT&T's. And the iPhone maker itself annihilated Wall Street's estimates and is reaping the benefits of its enormously popular product; earlier in the week, Apple reported first-quarter revenue of $46.33 billion, a 73 percent increase from last year's first quarter.
AT&T's iPhone sales were a large part of its record 9 million smartphones sold; fourth-quarter smartphone sales were 50 percent greater than the company’s previous quarterly record. Further, sales of branded computing devices rose nearly 70 percent from the fourth quarter of 2011, totaling 571,000 and reaching 5.1 million total subscribers. Tablets accounted for 311,000 of that figure. While strong, analysts said those numbers have tremendous growth potential.
"[Technology Business Research] believes there is significant opportunity for operators, particularly AT&T, to grow the number of tablets connected to their network," said Kate Price, senior analyst at the research firm. "Currently, the vast majority of consumers use tablets in a Wi-Fi-only environment. Bundled data plans with attractive price points would spur tablet connectivity to wireless networks, adding incremental data revenue growth for operators."