The surge in tablet usage helped boost AT&T’s wireless revenue for the latest quarter, but profits declined as costs surged, the company said Tuesday.

AT&T’s coffers were drained by smartphone sales, which it subsidizes in the hope of making money back over the life of two-year contracts. AT&T also made investments to increase its home broadband speeds.

AT&T Inc., the country’s largest telecommunications company, said it earned $3.8 billion, or 71 cents per share, in the April-to-June period, compared with $3.9 billion, or 66 cents share, a year ago.

Adjusted for a one-time gain of 4 cents for the sale of shares in Mexico’s America Movil, the latest earnings were 67 cents per share, 1 cent below the average analyst forecast as polled by FactSet.

AT&T’s revenue was $32.1 billion, up 1.6 percent from a year ago and well above the average analyst estimate at $31.8 billion.

The Dallas-based company added 550,000 wireless devices to its contract-based plans, which are the most lucrative.

That was the highest second-quarter figure in two years. However, all but 153,000 of the new devices were tablets, which carry lower monthly fees than phones.

AT&T shares fell 31 cents, or 0.9 percent, to $35.50 in extended trading, after the release of the report.

 


Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.