AT&T Profit Rises on Smartphones and Internet Service

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Americans' infatuation with smartphones and high-speed Internet helped AT&T post solid profits over its first quarter this year.

AT&T reported on Tuesday that net income in the first quarter grew 5.2 percent to $3.7 billion, or 67 cents a share, up from $3.6 billion from the same quarter a year earlier. The company attributed the increase to especially strong sales of smartphones and major growth in its paid-TV and high-speed Internet service, U-verse.

The company said revenue climbed 1.8 percent to $31.8 billion.

The net income was above the expectations of Wall Street analysts. They had expected 64 cents a share and revenue of $31.7 billion, according to a survey of analysts by FactSet.

Randall Stephenson, AT&T's chairman and chief executive, said in a statement that the company's wireless network performance "helped drive our best ever first quarter for smartphone sales, improved wireless churn and strong growth in mobile data revenues."

The company, based in Dallas, said it sold six million smartphones, the most the company has ever sold over a first quarter, typically a slow season for the phone business. It also increased the amount of money it makes on mobile data, the fees people pay to get on the Internet with its network, to $5.1 billion, up 21 percent from last year. And it added 2.5 million new U-verse subscribers, the most additions for its broadband service in eight quarters.

AT&T and its rival Verizon Wireless dominate the majority of the American phone market, possessing two-thirds of wireless subscribers. But now that most people who want a cellphone already own one, wireless carriers are seeing a slowdown in the number of contract subscribers they are adding, and AT&T is no exception.

The company said it added 296,000 contract subscribers, up from 186,000 subscribers last year. But this subscription number includes new iPad customers, which carriers typically do not include when counting subscriber additions, meaning phone subscriber growth may be much lower than it sounds.

To tap into new sources of revenue, AT&T is offering other wireless services. The company earlier this year introduced Digital Life, its connected home security system. The system, which will be released this quarter, allows home owners to connect appliances to the Internet, like lamps and surveillance cameras, and remotely control them with an AT&T smartphone app. Customers can also use the service to monitor their homes from afar by receiving a text message if a burglar trips a motion sensor, for example.

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This article originally appeared in The New York Times.


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