AT&T Earnings Jump 26%

by Jeff Wiener on July 23, 2010

3.2 million iPhone activations have helped AT&T claim an earnings jump of 26% in the second quarter. The carrier reported earnings of $4 billion compared to $3.2 billion in the prior year’s second quarter.

Sales were up 0.6% to $30.8 billion.

The iPhone 4 activations during the quarter certainly have everything to do with the earnings spike for AT&T. According to the company, 27% of those activations came from customers new to AT&T. And preorders for the iPhone 4 were ten times higher than preorders for the iPhone 3GS from a year earlier.

AT&T even saw a reduction in its churn rate, which refers to the amount of people leaving the carrier. The company hit a record low churn rate with 1.29%, which is down from the 1.48% in the same quarter a year ago.

The carrier added 1.6 million wireless subscribers in the quarter for a total of 90.1 million customers.

The numbers put AT&T in confident position going into the rest of the year. While the iPhone 4 activations are largely to thank for the satisfying digits, overall sales from the wireless data sector were also up by 27%. The carrier saw growth of about 24% in customers signing up for data plans.

Sales of AT&T’s U-verse service, offering package deals of digital television and internet services, reached $1 billion in the quarter, more than doubling the revenue from the previous year’s same quarter. U-verse subscribers rose by 60%.

The good news has caused AT&T to adapt their forecast for the remainder of 2010. Initially they stated that they had hoped to be on par with 2008 numbers, but the new quarterly results have caused the carrier to adjust their forecast to say that they intend to surpass the 2008 numbers. The company is clearly confident and, despite the continued perception that they don’t satisfy customers, they continue to do quite well where it counts.

Landing the iPhone is certainly a big help and its presence with the brand likely directs people to other purchases, like bundles and packages. While it’s unfair to say that AT&T owes it all to the iPhone, I think it is fair to say that AT&T is certainly reaping the benefits of its contract with Apple.

{ 1 comment… read it below or add one }

Karl Taylor July 24, 2010 at 11:57 am

Telecom sector still booming even in recession and Iphone broke all the record of success once again.

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