AT&T Inc. (NYSE: T) reports Thursday that the company’s net income dipped as revenue from traditional landlines fell faster than the company could cut costs, according to Associated Press.
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AT&T, the country's largest telecommunications provider, said Thursday it added 2 million wireless subscribers in the third quarter, matching the pace of a year ago despite a general slowdown in industry growth because most people already have a cell phone. In addition, AT&T added a record 3.2 million iPhones in the quarter.
Analysts had expected AT&T to add about 1.5 million wireless subscribers, exceeding expectations and thus, lowering expectations for other wireless carriers.
AT&T is the first major telecommunications company to report for the quarter. Rival Verizon Communications Inc. (NYSE: VZ) posts its results Monday.
AT&T earned $3.19 billion, or 54 cents per share, from July through September. That was down 1.2 percent from the same period a year earlier.
Analysts polled by Thomson Reuters had on average expected a profit of 50 cents per share. AT&T's revenue fell 1.6 percent to $30.9 billion, matching analyst expectations.
Shares of AT&T, which is based in Dallas, were up 92 cents, or 3.6 percent, to $26.86 in pre-market trading.
Wireless generates most of AT&T's profit, while wireline is still where most of the revenue comes from. That revenue is shrinking rapidly as people switch to phone service from cable companies or give up on landlines entirely. AT&T is cutting jobs to save money as it has lost nearly 1 million home phone lines in the third quarter.
While the wireless results were strong, they continued to demonstrate AT&T's reliance on Apple Inc.'s iPhone, for which it is the sole U.S. carrier. The company's big focus is on increasing revenue from data services by selling more phones that encourage e-mail use and Web surfing. It added 4.3 million such phones in the quarter, but iPhones accounted for three-quarters of them.
Meanwhile, other carriers are trying to position their phones as worthy competitors to the iPhone. Verizon Wireless last weekend launched a TV ad campaign for the Droid, a new phone from Motorola Inc. (NYSE: MOT) that runs the software of Google Inc. (NASDAQ: GOOG). The ad aggressively targets the iPhone, listing features it lacks and the Droid has.
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