AT&T Earnings Drop, But iPhone 3G is a Hit

AT&T said Wednesday it earned $3.1 billion, or 53 cents per share, in Q1 2009, down from $3.5 billion, or 57 cents per share, for Q1 2008. That dip in earnings amounts to 9.7% year-over-year.

Revenue fell about 0.6% percent to $30.6 billion.

The iPhone contributed much good news, however. The company activated more than 1.6 million iPhone 3G devices during Q1. Meanwhile, wireless data revenue increased 38.6% to $3.2 billion. Yeah, getting forced to get a data plan to get everyone's favorite device helps.

Overall, AT&T added a total of 1.2 million new subscribers to reach 78.2 million in total.

One thing to note, however, is that the iPhone adds were down from 1.9 million during the Q4 2008. More than 40% of those activations were new to AT&T, which is good, but this has to be worrisome for Q2 2009 revenue, as with rumors about a new iPhone, many may simply wait.

Randall Stephenson, AT&T chairman and chief executive office said:

"I am particularly pleased with the success of our iPhone 3G initiative, which has driven strong high-end customer growth and delivered financial benefits ahead of our original outlook. Business and consumer expectations for mobility are on the rise, wireless innovation is flourishing and the opportunities ahead are substantial. AT&T is strongly positioned to lead in the next generation of wireless growth."