AT&T reports record iPhone sales

  @jtotoole January 24, 2013: 5:42 PM ET
at&t iphone sales

An iPhone display at an AT&T cellular store in Houston, Texas.

NEW YORK (CNNMoney)

AT&T announced record quarterly smartphone sales on Thursday.

The company sold 10.2 million smartphones in the fourth quarter, which it said was the most ever for a U.S. carrier. Ma Bell activated a record 8.6 million iPhones, though AT&T said it also had its best-ever quarter for sales of Android phones.

The news comes on a day when Apple shares sold off sharply, sinking 12% following the release of the company's quarterly results Wednesday afternoon.

Apple (AAPL, Fortune 500) reported a record quarter, boosted by strong iPhone and iPad sales, but the popularity of cheaper versions of its mobile devices pinched profits.

AT&T's overall fourth-quarter smartphone sales topped the previous record of 9.4 million from the fourth quarter of 2011.

Ironically, strong smartphone sales are bad for carriers' profit margins.

A new phone you buy for $199 may cost your carrier two or three times as much when they buy it from the manufacturer. They pay a heavy upfront subsidy to get you hooked on a long-term contract.

AT&T did not break down iPhone activations by model in its press release. But the company noted that its wireless operating margins took a hit in the fourth quarter, a possible sign that it sold a large number of newer iPhone 5s as well as older iPhone 4S and iPhone 4 models.

AT&T rival Verizon (VZ, Fortune 500) said Tuesday that it sold a record 6.2 million iPhones in the fourth quarter, making up two thirds of its total smartphone sales.

Overall, AT&T (T, Fortune 500) reported earnings per share, excluding special items, of 44 cents, on $32.6 billion in revenue. Analysts surveyed by Thomson Reuters expected the company to post earnings of 45 cents a share on $32.2 billion in revenue.

Shares rose 0.4% in after-hours trading.

CNNMoney's David Goldman contributed reporting. To top of page



Join the Conversation

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.