Posted: Oct 23, 2013 6:26 PM
Updated: Oct 23, 2013 6:27 PM
NEW YORK (AP) AT&T's third-quarter profit and revenue increased as the nation's largest telecommunications company added more smartphone and broadband subscribers.
AT&T Inc. said Wednesday that its net income was $3.81 billion, or 72 cents per share, in the July-September quarter, up 5 percent from $3.64 billion, or 63 cents per share, in the same period a year ago. Adjusted earnings were 66 cents per share in the latest quarter, a penny above analysts' expectations.
Revenue grew 2 percent to $32.16 billion from $31.46 billion, slightly below what analysts were expecting.
Analysts, on average, had expected revenue of $32.18 billion according to FactSet.
Wireless revenue, which includes equipment sales, grew 5 percent to $17.5 billion. AT&T said it added nearly 1 million net wireless subscribers in the third quarter. It added 566,000 wireless devices to its contract-based plans, which are the most lucrative. Of these 178,000 were smartphones and the rest tablets, which carry lower monthly fees than phones. AT&T is the second-largest cellphone company in the U.S. after Verizon Wireless.
Churn, or the turnover rate for contract-based subscribers, was 1.07 percent during the quarter, down slightly from 1.08 percent a year ago but up from 1.02 percent in the second quarter of this year.
AT&T is benefiting the growing popularity of smartphones and tablet computers, but the company is also facing competition from Verizon Wireless as well as smaller rivals such as T-Mobile and Sprint Nextel Corp. Verizon said last week that it added 1.1 million net retail wireless connections during the quarter. Of that total, 927,000 were connections that involved monthly service contracts, much more than AT&T's 363,000 in the same period.
AT&T also reported a 2 percent increase in operating expenses, to $26 billion from $25.4 billion. The company has been investing in technology to increase home broadband speeds. Its U-verse TV and Internet service reached 10 million subscribers during the quarter.
Shares of the Dallas-based company slid 3 cents to $35.25 in after-hours trading. The stock had closed up 5 cents at $35.28.