Earnings: AT&T Net Income Falls 23.6 Percent; iPhone Subsidies Continue To Bite

image Fourth quarter earnings fell 23.6 percent at AT&T (NYSE: T), which posted net income of $2.4 billion, or 41 cents a share, on revenue of $31.1 billion. Last year, the telecoms giant reported earnings of $3.1 billion, or 51 cents per share. It reported adjusted earnings of 64 cents a share, falling just shy of the $0.65 share estimate from a *Thomson Reuters* poll of analysts. Revenues, which grew 2.4 percent, meeting analyst expectations, were boosted by 13.2 percent growth in its wireless unit and a 14.2 percent increase in wireline IP data revenues. Wireless revenues came in at $12.9 billion, while the wireline business contracted 3.3 percent to $17 billion. Voice revenues, however, were hard hit, as expected, falling 10 percent to $9 billion. The iPhone continued to lure users to its wireless unit, but subsidies of the handset continued to hit EPS. AT&T said $0.07 of the EPS came from its iPhone subsidies, as well as hurricane related expenses and forex impacts.

Wireless Unit:

Wireless revenue up: Wireless revenues grew 13.2 percent to $12.9 billion in the fourth quarter.

Wireless customer additions: AT&T added 2.1 million net wireless subscribers in the fourth quarter, up slightly from 2 million net adds in Q3. This was one bright spot, beating analyst expectations of 1.9 million. It now has a total of 77 million.

iPhone details: 1.9 million iPhones were activated in the fourth quarter, down from 2.3 million in the third quarter. Approximately 40 percent of iPhone activations were for customers new to AT&T, as it was in Q3. This amounts to around 760,000 new customers coming to AT&T for the iPhone. Again, AT&T touted the iPhone

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