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

FEATURED VIDEO

12 Comments

1. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

Looks like AT&T is missing the iOS exclusive. That and being behind the power curve on Android releases....

2. remixfa

Posts: 14605; Member since: Dec 19, 2008

well of course iphone sales are going to slow before the new one launches. doesnt help that the i4 is 1.5 years old. We will see how the 4s survives next quarter.

3. KEVlN

Posts: 83; Member since: Aug 19, 2011

This doesn't surprise me... Sprint is offering unlimited data, Verizon is offering the best coverage in America, and At&t is offering what? The same price for mediocre services. They need to change there strategy. If the T-Mobile buyout doesn't work out, they're going nowhere fast...

4. bigdawg23

Posts: 467; Member since: May 25, 2011

Then why is Sprint still losing subscribers if they have unlimited data?

10. nb2six

Posts: 298; Member since: Apr 27, 2011

Coverage Map says is all in the end. You can't compete with the big boys if you can't deliver on service.

5. bronxbomber

Posts: 82; Member since: Apr 10, 2009

sprint has actually gain more customers than its lost in the last 2 quarters. the customers that are actually being lost are the iden customers. give sprint about a yr or so and once iden is fazed out, sprint will be adding alot more subcribers. now the only major reason people will leave sprint is coverage...bottom line.

6. kshell1

Posts: 1143; Member since: Oct 05, 2011

sprints working on the coverage to. i have a feeling in 2012 when lte starts rolling out sprint will be strong

7. DonMateo28

Posts: 14; Member since: Oct 20, 2011

Sprint will be bought out by Verizon 2014, in the end iti'll just be AT&T and Verizon the Red vs. the Blue? Any bets?! lol

8. networkdood

Posts: 6330; Member since: Mar 31, 2010

You are all missing the issue - APPLE came out with the new iphone last year in the 3rd quarter. So, of course they are down...stupid anaylsts....next quarter will be fine as iPHONEARENA is already reporting...record number of Androids activated in 3rd Q also.

9. InspectorGadget80 unregistered

Looks like they need to upgrade their computers. Every time the Iphone launch they always have problems activating them. While other phones does not

11. CX3NT3_713

Posts: 2363; Member since: Apr 18, 2011

Lol, no surprise there... iPhones aren't cool any more.. lol

12. shimmyx20

Posts: 280; Member since: Mar 03, 2009

One important thing to keep in mind when comparing 3rd quarter from last year to this year is that in 3rd quarter last year, AT&T had the iPhone 4. This year, the iPhone 4S didn't come out till 4th quarter. (The 3rd quarter ended on September 30th)

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.