AT&T (NYSE:T) posted flat third-quarter earnings and sales from the year-earlier period and topped EPS expectations on Wednesday, as strong wireless sales were partially offset by continued softness in its wireline business.
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Total wireless revenue, which includes equipment sales, climbed 6.6% to $16.6 billion during the quarter, while wireless service revenue grew 4.5% to $14.9 billion.
Data revenue jumped by 18.3% to more than $1 billion as more customers accessed the Internet from smartphones and tablets and AT&T posted its best postpaid ARPU growth in six quarters, increasing 2.4% to $65.20.
“We had another impressive quarter with strong earnings growth, record cash flows and solid returns to shareholders through dividends and share buybacks,” AT&T CEO Randall Stephenson said in a statement.
The company reported net income of $3.6 billion, or 63 cents a share, compared with flat income in the year-earlier period, or 61 a share.
When adjusted for the divestiture of its advertising solutions business, AT&T said it earned 62 cents, topping by three cents average analyst estimates in a Thomson Reuters poll.
Revenue was flat year-over-year at $31.5 billion, virtually matching the Street’s view of $31.58 billion. When excluding the impact of the divested advertising solutions business, the wireless company said adjusted revenue grew 2.6% from 2011.
Dallas-based AT&T, which competes with Verizon Wireless, a joint venture between Verizon Communications (NYSE:VZ) and Vodafone (NYSE:VOD), sold 6.1 million smartphones in the third quarter. That's up about 1.3 million from the same quarter in 2011 and brings smartphones’ share of AT&T’s postpaid subscribers to 63.8% from just 52.6% last year.
Sales of Apple’s (NASDAQ:AAPL) iPhone, the latest generation of which was launched late last month, grew to 4.7 million in the three months ended Sept. 30, with 18% of those sales deriving from new AT&T customers. The carrier also said it recorded its best-ever sales quarter for Google’s (NASDAQ:GOOG) Android and Microsoft’s (NASDAQ:MSFT) Windows phones.
Some of the wireless gains, however, were offset by a 1.6% decline to $14.8 billion in wireline revenue, led by weaker voice revenue.