AT&T profits up 25 percent on wireless growth

AT&T posted a 25.6 percent increase in fourth-quarter earnings as its wireless and new TV businesses continued to grow.

AT&T's earnings were also largely aided by sharp cost-cutting.

In the quarter that ended December 31, AT&T said Thursday, it earned $3.09 billion, or 51 cents a share. During the same period a year ago, the company earned $2.4 billion, or 41 cents a share. Revenue for the fourth quarter dropped slightly by about 0.7 percent to $30.86 billion, mostly due to weak sales in AT&T's legacy local-phone business.

AT&T met analyst expectations, which had pegged the phone company to report revenue of about $30.87 billion and earn 51 cents per share.

Wireless was once again a hefty contributor to AT&T's bottom line. And it appears customers are still in love with the iPhone, despite complaints about the company's network. AT&T said it added 2.7 million new wireless customers during the quarter.

AT&T beat rival Verizon Wireless in total wireless subscription additions. Verizon reported this week that it added 2.2 million wireless customers during the fourth quarter.

That said, AT&T added only 910,000 so-called post-paid customers, who sign a contract for service. Verizon signed up about 1.2 million of these valuable customers. Customers on contracts typically pay more per month, and they tend not to leave the service as frequently as customers who pay as they go.

AT&T saw strong growth in wireless data service revenue. Revenue from these services, which include messaging and access to applications, was up 26.3 percent to $3.9 billion.

The company could see further growth in wireless data revenue as it adds non-phone devices, such as the new Apple iPad tablet, to its mix of products using its network. Apple announced Wednesday that AT&T will be the exclusive 3G wireless carrier for the much-anticipated new product.

AT&T also reported it added a total of 248,000 AT&T U-verse TV subscribers. It now services more than 2 million U-Verse TV customers. In total, AT&T added roughly 1 million U-verse customers in 2009.

AT&T will host a conference call later this morning to discuss results.

[siege911]

AT&T added 2.7 million customers while Verizon only added 2.2 customers? (Note the lack of the word "million") That's a fairly large difference. ;-)

[sharmajunior]

LOL,

It sounds pretty close to Two and a Half Men.

[Knightro2]

I'm wondering if those 2.7 million and 2.2 million numbers factor in account loses as well?

[bluemist9999]

How exactly is AT&T prepared to handle the high growth in wireless traffic, if they are also making heavy cuts?

While I assume the cuts aren't in their wireless area, the money saved should be spent improving their backbone. Granted, that is a long-term and very costly task, but any short-term savings will be swamped by a much higher churn rate when the network can't handle the load of iPhones on it.

[tvanderzanden]

bluemist9999~

Agreed, I also find it hard to believe that a company whose profits have increased so much during a downturn in the economy are still cutting costs?? I would think that first cut should be to the Ad campaign and Legal pissing match that have going with Verizon over the best 3G.

IF you are making profit and you want to continue to do so, invest that money back into customer and the service you provide. It will go a hell of a lot further than legal fees and paid actors.

[rossby]

Maggie: The actual number of postpaid net adds for Verizon is 1.1M, not the 1.2M you quote above. Source: Verizon 4th Quarter 2009 Earnings Conference Call, 1/26/2010, slide 9.

[kpga1]

That's because the AT&T problems have been overblown.
People just like to b***h. Verizon has good service but their
advertising is highly deceptive. I had Verizon for years and
switched to AT&T a couple of years ago when I bought my
first iphone and jettisoned the Blackberry. I travel from Indiana
to Mississippi and from Maine to Miami and all points in
between by automobile (23 states). If AT&T was as bad as
is claimed, I would have gone back to Verizon in a heartbeat.

[Knightro2]

What is deceptive about Verizon's advertising?

[joetesta70]

All on the back of bad iPhone service.

[Ross_2893]

Well I'm sure people experience bad service with at&t, but which person hasn't with any other Telecommunication's network? So with that I'd actually beg to differ because with my iPhone on at&t's network I have never had any problems of the sort, i literally have service everywhere i go. I am also getting blazing speeds; faster than any of the other U.S. telecommunication company's can provide and probably even the fastest speeds in the U.S.

Here is my proof;

http://www.photoshop.com/accounts/2e28396d01a943e5a48188aced47eb2f/px-assets/a545ebf8441f4244a67d44af96156304

http://www.photoshop.com/accounts/2e28396d01a943e5a48188aced47eb2f/px-assets/e6040cb92f5e4e6582e4fc32fcee7ef1

http://www.photoshop.com/accounts/2e28396d01a943e5a48188aced47eb2f/px-assets/66da777509264b89aa0ebea6593e46d8

Again I understand that it depends on you're location but i can say for a fact that in CT at&t's network is far superior to Verizon's (In both network speed and coverage)

[wclanders]

I love the Iphone but hate the AT&T service. I live in a dead zone in the heart of silicon valley. When Apple offers there Iphone somewhere else I'll change services in a heartbeat regardless of the contract fee.