ATT, the nation’s biggest telecommunications company, reported third-quarter results Thursday that just met analysts’ expectations, amid growing competition from rival wireless carriers Verizon and Sprint. The company posted a profit of $3.6 billion, or 61 cents a share, compared with a profit of $12.3 billion, or $2.07 a share, during the same quarter a year earlier, although the 2010 figures were bolstered significantly by the sale of assets. Analysts had expected ATT to earn 61 cents a share.
The company said that it activated only 2.7 million iPhones during the quarter. That number is the lowest the company has reported in several quarters, signaling that ATT is beginning to feel the competitive threat of rival carriers who are now also selling the iPhone. In addition, many wireless customers were probably waiting for the release this month of the next-generation iPhone.
Investors seemed slightly disappointed by the earnings, as shared dipped 2 percent in pre-market trading. Analysts say that the wireless industry is struggling for growth amid growing saturation.
“This may be the new normal,” said Craig Moffett, an analyst with Sanford C. Bernstein who follows the telecommunications industry. “It looks more and more like ATT is going to have to depend on organic growth and unfortunately, there isn’t any. The wireless industry just isn’t a growth industry anymore.”
ATT said, however, that during the quarter it sold 4.8 million smartphones, which made up nearly two-thirds of all device sales during that period. The company also said that the sale of Android devices more than doubled year over year.
“Mobile broadband growth continues to be robust, execution was strong across the business, and we delivered another solid quarter,” said Randall L. Stephenson, the chairman and chief executive of the company, in the statement. “The next waves in the mobile Internet revolution represent tremendous growth potential, and we are laying the groundwork required for that future.”
The company said that it added 319,000 wireless customers during the quarter. The company has faced greater competition from rival carriers who are also selling portfolios of smartphones and mobile devices.
ATT’s operating revenue slipped to $31.48 billion during the quarter, compared with $31.58 billion a year ago. Analysts surveyed by Thomson Reuters had expected the company to report operating revenues of $31.60 billion.
The operator is still looking for regulatory approval to move forward in its acquisition of T-Mobile, although Mr. Moffett said it is looking more and more like that deal may disintegrate under government scrutiny.
Mr. Stephenson said that ATT was still working “toward a successful completion of our planned T-Mobile USA merger.”
Article source: http://feeds.nytimes.com/click.phdo?i=f173712974b234e0a9067996a6b9521e
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