AT&T reports lower Q1 earnings despite 2.7 million iPhones activated in the period

The new health care bill forced AT&T to take a nearly $1 billion charge against its first quarter earnings and as a result, the company reported that it earned 21% less than the year ago period. If not for the one time write off, it would have been an exceptional quarter for the company as 1.9 million new wireless accounts were opened-a company record for the first quarter. Of that total, 512,000 were postpaid customers who have signed a contract with the operator. The vast majority of new customers-1.1 million-fell into the connected devices category which includes items like e-book readers or other non phone devices that have wireless built-in. For the three months, AT&T activated 2.7 million iPhones and now has 87 million wireless customers which puts them a close second to Verizon Wireless which has 91 million customers. AT&T Wireless turned in some improving internal numbers as churn dropped to 1.3% and postpaid churn dropped to 1.07% Those are the best numbers that the carrier has ever turned in for those two categories and it is the fifth consecutive quarter of year over year improvement. Wireless margins rose to 29.9% in the first quarter from 26.9% in the previous year. That improvement is credited to iPhone customers who spend more money each year that they have the touchscreen device.

source: AllThingsDigital