AT&T Loves Apple: Income, Sales Rise on iPhone, iPad Activations

AT&T Inc.s love affair with Apple Inc. stayed strong in the second quarter, as the service provider on Thursday reported higher profit and revenue thanks in large part to its status as the exclusive iPhone and iPad carrier in the United States.

AT&T activated a record number of iPhones 3.2 million in the three months ended June 3;, much of that was because of the launch of the iPhone 4 in the quarters final days. Still, AT&T signed up fewer new postpaid wireless subscribers than a year earlier 496,000 as compared to 512,000. Thats likely due to ongoing economic weakness as more consumers choose prepaid mobile plans. Indeed, AT&T added more prepaid users 300,000 than it has in any quarter since 2007.

The Dallas-based company also reaped the rewards of being the sole iPad carrier. It activated about 500,000 iPad 3Gs in the first two months the less-expensive version of the tablet computer only uses Wi-Fi to access the Internet. AT&T further powered 896,000 devices such as the Kindle e-reader.

Overall, AT&T reported $4.02 billion in net income, up from $3.2 billion a year earlier, and $30.8 billion in revenue, up from $30.7 billion. But the companys upswing came not just from iPhone sales cost cuts hit hard in the quarter, too. So far this year, AT&T has axed more than 10,000 jobs; most of those layoffs have come in the wireline segment, which has seen declines for years. However, because AT&T cut costs faster than revenue fell, it posted a small operating-income increase in the wireline segment. AT&T closed the quarter with 272,450 employees.

Shares of AT&T were trading 2.59 percent higher at $25.57 about half an hour before Wall Streets close.

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