AT&T Beats Earnings Estimates as Customers Transition to Smart Phones

AT&T, the largest US phone company, topped analysts' first quarter estimates as more customers began using smart phones and users spent more time online. AT&T T earned $3.6 billion, 60 cents per share, in the first quarter, compared to $3.4 billion, or 57 cents per share, a year earlier, the Dallas, Texas-based company said in a statement issued today. This beat the 57-cent average estimate of analysts surveyed by Bloomberg. "We continue to capitalize on our terrific momentum in mobile Internet," Randall Stephenson, AT&T chairman and chief executive officer, said in the statement. "Smartphone and branded computing device sales continue to set a record pace.” The company's retail postpaid customers, customers who receive a bill after using the cell phone carrier's services, continued to transition to smart phones as 59% of the company's customers used the high-data phones compared to 46% a year earlier. AT&T also added about 726,000 net postpaid customers in the quarter. The company sold 5.5 million smart phones, a new record for the first quarter of the year. Smartphone customers are more loyal to the brand of phone they are using than other postpaid subscribers and buy more expensive plans to allow them to spend more time online. Nearly 90% of smart phone subscribers at AT&T are on shared family or business plans. Data revenue continued to grow, up 19.9% from a year earlier to $6.1 billion Average monthly revenue per subscriber rose 1.7% to $64.46 per postpaid wireless subscriber, beating the $64.29 average estimate of analysts surveyed by Bloomberg. AT&T, the first wireless carrier to offer the Apple APPL iPhone, has faced increased competition from Verizon VZ and Sprint S as the two other providers have also began selling the contracts for users of the phone. Last week Verizon reported a gain of 501,000 postpaid customers, with about 47% of the company's customers using smart phones. Verizon customers pay an average of $55.43 per month.