AT&T Gets Wireless Boost, Apple iPad

Updated with conference call iPad comments and AT&T share price.

DALLAS (TheStreet) -- New wireless subscribers and yesterday's surprise announcement of a deal to carry Apple's (AAPL) new iPad set the mood for AT&T's (T) fourth-quarter earnings report, which met Wall Street's expectations.

Thanks in part to continuing demand for e-readers, smartphones, netbooks and navigation devices, AT&T added 2.7 million new wireless customers despite rumors of slowing subscriber growth.

The telecom giant's wireless adds beat arch-rival Verizon (VZ), which announced 2.2 million new subscribers when it reported its own fourth-quarter results earlier this week.

Apple's iPad

AT&T's post-paid subscriber adds, however, were only 910,000, slightly below at least one analyst's projection.

The bellwether earned 51 cents a share on net income of $3 billion, up from 41 cents a share and net income of $2.4 billion in the prior year's quarter, when AT&T took severance and merger-related charges. Excluding items, analysts had predicted earnings of 51 cents a share.

AT&T's fourth-quarter revenue came in at $30.9 billion, down from $31.1 billion in the prior year's quarter, but a slight sequential increase. Analysts had forecast sales of $30.86 million.

There has been a great degree of interest in AT&T during recent months, thanks to the rapidly shifting dynamics of the telecom market. In addition to heightened competition from Verizon, AT&T's exclusive deal with Apple to sell the iPhone is said to end this year, although the telecom firm has refused to discuss this.

As expected, AT&T executives faced questions on Apple's iPad, during the company's fourth-quarter conference call. Touted as a new category of devices that can outperform smartphones by delivering Web browsing and e-books, the iPad is Apple's biggest product launch since the iPhone. In a surprise move, though, Apple named AT&T -- not Verizon -- as the iPad's 3G telco partner.

"We believe the iPad is a terrific new service, and we're pleased that it will operate on our network," said Rick Lindner, the AT&T CFO, during the fourth-quarter conference call. The iPad, he added, will contribute revenue to AT&T's pre-paid wireless business.

"Right now, I think the economics will be very positive because it will be a very low cost device for us," said the AT&T finance chief. "We're not subsidizing the devices."

Customers will pay either $15 or $30 month, via a credit card, for AT&T's two iPad service plans, and Lindner confirmed that AT&T, not Apple, will see this revenue. "There are no agreements with respect to revenue share on the iPads for either $15 or $30 plans," he said, in response to an analyst's question