Telecom biggie AT&T Inc (T) set a new record with the sale of 10 million smartphones in the fourth quarter of 2012. The company held a record of selling 9.4 million smartphones during October–December 2011.
The last quarter of 2012 also witnessed highest sales of Android and Apple smartphones. On average, the company sold more than 110,000 smartphones daily, including Android, Apple and Windows devices. With this high sales figure, the total smartphone sales of the company in 2012 is expected to reach 26.7 million, a bit higher than the earlier forecast of 26 million.
Wireless carriers like AT&T place smartphones on shop shelf at high price as customers get attracted to the devices that run on advanced technologies and offer smooth networking experience. The operators shell out heavy subsidies to the handset manufactures to offer the mobile phones to customers at a discount under two-year contract plans.
San Antonio, Texas based AT&T will release its full fourth-quarter 2012 financial results on January 24, 2013 after the close of trading. The Zacks Consensus Estimates for the fourth quarter and 2012 earnings currently stand at 48 cents per share and $2.38 per share, respectively. The estimates reflect a respective year-over-year growth of 15.1% and 8.2% for the fourth quarter and 2012.
We maintain our long-term Neutral recommendation on AT&T – the second largest provider of wireless services in North America after Verizon Communications (VZ). The company, currently, retains a Zacks Rank #3, implying a short-term Hold rating on the stock.
We remain optimistic about AT&T’s growth prospects, driven by subscriber accretion, higher smartphones adoption, LTE mobile broadband network, iPhone sales and U-verse expansion that will lead to improved revenue growth.
The company’s foray into cloud computing and hotel WiFi businesses is expected to lead to better profitability. Other positive attributes for the company include a strategic realignment initiative and healthy financial profile. However, persistent access line losses, competitive pressures and regulatory issues will likely weigh on the stock in the coming days.
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