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AT&T operating profit down on smartphone costs
2013-07-24 08:39:00| Telecompaper Headlines
(Telecompaper) AT&T reported second-quarter sales up 1.6 percent from a year earlier to USD 32.1 billion. Growth in mobile and consumer wireline services was offset by the sale of its Advertising Solutions business unit. Operating profit fell to USD 6.1 billion from USD 6.8 billion, and net profit dropped to USD 3.8 billion or 71 cents a share, from USD 3.9 billion or 66 cents a share a year ago. Capex reached USD 5.5 billion in the quarter, leaving operating cash flow of USD 4.0 billion. Mobile service revenue was up 4.1 percent to USD 15.4 billion, while operating profit fell 7.7 percent to USD 4.7 billion on a double-digit increase in operating costs. AT&T blamed this on higher smartphone sales, which reached 6.8 million units sold in the quarter and are now used by 73 percent of its postpaid customer base. In total, AT&T added a net 632,000 new customers in the quarter, including postpaid adds of 551,000 (of which 398,000 tablets), 484,000 connected devices and 11,000 new prepaid lines. Reseller customers fell by 484,000 in the quarter. The increasing number of tablets led to a slowdown in ARPU, which rose just 1.8 percent. At the wireline activities, revenues fell 0.9 percent year-on-year to USD 14.8 billion, and operating profit dropped 15.8 percent to USD 1.6 billion. Consumer revenues were still up 2.4 percent to USD 5.8 billion, led by growth in the U-verse services.
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Category:Telecommunications