Today after the close AT&T (T) reported earnings where profits declined as costs surged.
Good things were a surge in tablet usage, a trade-in promotion and a fee tacked onto bills that helped boost AT&T’s wireless revenue for the latest quarter.
However, AT&T’s coffers were drained by smartphone sales, which it subsidizes in the hope of making money back over the life of two-year contracts. The company set a second-quarter smartphone sales record, helped by a promotion that gave customers $100 off a new phone when trading in an old one.
Costs were also up due to investments AT&T is making to boost home broadband speeds.
AT&T Inc. (T) earned $3.8 billion, or 71 cents per share, in the April-to-June period, compared with $3.9 billion, or 66 cents share, a year ago. EPS rose despite the overall profit drop because AT&T has been buying back shares in addition to paying out its dividend. Adjusted for a one-time gain of 4 cents for the sale of shares in Mexico’s America Movil, the latest earnings were 67 cents per share, 1 cent below the estimates. AT&T’s revenue came in at $32.1 billion, up 1.6 percent from a year ago and above Wall Street’s estimate of $31.8 billion.
AT&T shares are down -0.45% in after-hours trade.
AT&T Inc. (T) is up +6.23% year-to-date.
AT&T currently yields a 5.03% dividend.