This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

AT&T's Profit Dented by iPhone Subsidy

Updated from 9:24 a.m. EST

Telecom giant AT&T (T - Get Report) said Wednesday that its fourth-quarter profits dropped 23% from a year earlier as the company felt the impact of iPhone 3G subsidies, storm-related costs and unfavorable foreign exchange rates.

AT&T reported fourth-quarter earnings of $2.4 billion, or 41 cents a share, down 10 cents from a year earlier. Excluding charges, the company reported earnings of 64 cents, down from 71 cents in the prior-year's quarter. Analysts had estimated 65 cents, although this did not account for the impact of foreign exchange, which took 1 cent out of AT&T's earnings.

The company's revenue was $31.1 billion, up 2.4% on the prior year's quarter, and essentially in line with analysts' expectations of $31.35 billion.

"Despite the economic environment, we grew revenues in 2008, and I expect 2009 will be another year of overall revenue growth and solid progress for our company," said Randall Stephenson, the AT&T CEO, in a prepared statement.

The company also explained that the iPhone 3G, hurricane-related expenses and foreign exchange cut its fourth-quarter earnings by 7 cents.

AT&T also fell short of Wall Street's earnings target in the third-quarter, partly due to a strong performance from Apple's (AAPL - Get Report) iPhone 3G.

At that time, the company's earnings took a hit from the July 11 introduction of the newest iPhone, a product for which AT&T is the exclusive authorized U.S. service provider. AT&T continues to feel the impact of the popular smartphone. As part of the iPhone subsidy agreement between the two companies, AT&T's fourth-quarter profit was lowered by about $450 million.

The iPhone, however, helped drive AT&T's fourth-quarter wireless growth, with the company adding 2.1 million subscribers to reach a total customer base of 77 million, 7 million more than the same period last year.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $111.79 0.17%
Q $69.88 -0.30%
S $4.42 -1.80%
T $33.21 -0.27%
VZ $44.37 0.16%


Chart of I:DJI
DOW 17,081.89 -49.97 -0.29%
S&P 500 2,014.89 +15.91 0.80%
NASDAQ 4,796.6090 -42.0340 -0.87%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs