AT&T sales tick up on continued iPhone strength

From CNET News.com: AT&T said today that it posted a slight decline in its second-quarter profit, although revenue ticked up amid the continued strength of iPhone sales.

The Dallas-based telecommunications giant posted a profit of $3.6 billion, or 60 cents a share, compared with a year-earlier profit of $4 billion, or 67 cents a share. The year-ago results were helped by the sale of stock in Telmex Internacional. Excluding the Telmex asset sale, the year-over-year change would have been flat.

Revenue, meanwhile, rose 2.2 percent to $31.5 billion.

Analysts, on average, expected earnings of 59 cents a share and revenue of $31.31 billion, according to a survey by Thomson Reuters.

AT&T said it activated 3.6 million iPhones in the quarter, likely helped by sales of both the iPhone 4 and its cheaper $50 iPhone 3GS.

Long known as the iPhone carrier, that changed earlier this year when Verizon Wireless began selling the Apple smartphone. In preparation, AT&T began diversifying its product portfolio, aggressively embracing Android this year. The company said that its non-iPhone smartphones more than doubled from a year ago. In total, the company sold 5.6 million smartphones, and noted that 70 percent of the people who signed up for a service contract chose a smartphone.

The company's customer growth continues to be weighed down by its integration of Alltel and Centennial. The company added 331,000 net new contract customers, although the number jumps to 504,000 when excluding customer defections from Alltel and Centennial. The company also added 379,000 connected devices such as tablets and digital picture frames, an increasingly important part of its business.

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