AT&t is a telecommunication company which is a leader today in the current market state which provides various services such as wireless, digital TV’s, cell phones, Internet, U-verse, DSL and many more. The telecom giant was established in 2005. It is a US based company, in Dallas which has shown the tremendous hike of 26% in its earnings in this quarter with the help of IPhone.
Role of iPhone in these enhanced earnings of AT&T
There has been in increase of 26% in the profits of AT&T in the latest quarter the credit for which goes to a record break in the activations of the IPhones. A total of 3.2 million activations of IPhones happened which is unexpectedly high and this only gave a boost to the company’s earnings in this second quarter helping it to estimate its outlook for the complete year. If figures are analyzed, then this time the earnings are $4 billion. The sales figures have also rose by 0.6 percent and reached to more than $30 billion and within these 3.2 million activations of IPhones, the new customers of IPhones reported were 27%. One more remarkable point is that the demand of IPhone 4 this year is high by 10 times if it is compared with the IPhone 3G last year.
These figures are really impressive and have enhanced the confidence level of the company as this second quarter have been capable of improving the revenue slab and a good cash flow helping the company to pan the strategies for the rest of the two quarters where on one part, there has been such a boost, but at the same time on the other part, few users have also deactivated the services of IPhones but they are quite few in number as compared with the number of activations. On the whole, there are now 90.1 million customers in this year, an increase of 13% from last year. In the second quarter itself, the wireless subscribers added up to 1.6 million.
Earnings of AT&T in its other services
The results which are mentioned above have not added the results from its other software unit named Sterling Commerce, as the company is selling this unit to IBM for the amount of $1.4 billion. Apart from IPhone, there have been the earnings to the company from its other services also which is discussed in the coming paragraphs. In the wireless data segment of AT&T which includes access of Internet, messaging etc, the earnings are $4.4 billion, which was $936 million last year that means a jump of 27%. In a year, 24% wireless customers increased for the company’s data plans. If you talk about its U-verse services which include Digital TV, Internet, voice, then this segment reported the sales of $1 billion in the second quarter which is just double of what it was in the second quarter of 2009. The consumer IP revenue has also increased by 32% with the higher demand in this segment.
The results noticed are not only the result of sale of IPhones but also because of the measures taken by the company such as cost cutting which helped in reducing the operating expenses of the company by 2% as compared to the last year. The wages of employees were also very high increasing the cost to company which was taken care of by some lay offs done. All these measures taken all together with the selling activities will definitely help the company to increase its Earnings per Share, cash flows and margins in operating income in the rest half year.