AT&T third quarter profits miss Street estimates, iPhone activations slowing down

AT&T third quarter profits miss Street estimates, iPhone activations slowing down
AT&T has just reported its financial results for the third quarter of 2011 and this time profits were down as iPhone activations slowed down ahead of a new iPhone launch in Q4. Users’ expectations for the new, now available iPhone 4S, seem to be a big reason of the revenue decline. The quarterly results also missed Wall Street analysts expectations instantly pushing the carrier’s shares down 2.5%.

The second-largest US carrier added 319,000 postpaid subscribers in the third trimester, pushing the overall subscriber count over 100 million and getting closer to Verizon’s total subscription. It’s still less than the projected average of around 406,000 quarterly additions.

What worries investors the most is the slow growth in average revenue per user (ARPU). The carrier reported ARPU of $63.69, falling short of the analysts’ average.

On the positive side, though, now, more than a half or 52.6% of AT&T’s customers use a smartphone. AT&T’s wireless profit margin was also rock solid at 43.7%, exceeding the previously estimated 41.7%.

The iPhone remained the single biggest selling handset on AT&T, but Android sales were the ones to register the biggest growth, doubling from last quarter. Altogether smartphone sales at the carrier stood at 4.8 million for the trimester.

source: AT&T

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