* Adds 2.7 million net new mobile customers
* Q4 rev $30.9 billion vs Wall St view $30.9 billion
* Q4 EPS $0.51 vs $0.41 year earlier; in line with view
* Shares up barely; less than 1 percent
(Adds analyst comments, bylines)
By Paul Thomasch and Sinead Carew
NEW YORK, Jan 28 AT&T (T.N) reported a 26
percent rise in fourth-quarter profit, fueled by wireless
subscriber additions, particularly among users of e-readers,
smartphones and netbook computers to the Web.
AT&T's results reflect consumers' willingness to pay to
read newspapers online, find restaurants, text with friends or
navigate city streets using mobile devices. AT&T added some 2.7
million net subscribers in the fourth quarter -- nearly 1
million more than analysts predicted.
But analysts were not entirely impressed with the figure,
saying they were surprised AT&T added just 910,000 of the
highly prized monthly paying customers. Analysts had forecast a
figure above 1 million.
Profit margins were also slimmer than some had expected,
likely due to strong sales of Apple Inc's (AAPL.O) iPhone.
While AT&T's exclusive right to sell iPhone has paid big
dividends -- it recorded 3.1 million iPhone activations in the
quarter -- it also has hurt profit margins since AT&T
subsidizes the smartphone.
Its relationship with Apple will soon expand, with the two
companies now involved in a data deal for the upcoming tablet
computer called iPad, announced to much hype this
READING THE NUMBERS
The iPad will not hit the market for months, but other
similar devices are already proving beneficial to AT&T.
Analysts said, in fact, the quarter's upside surprise came
from the number of customers that AT&T added for devices such
as Amazon.com Inc's (AMZN.O) Kindle, Sony Corp's (6758.T)
Reader Daily Edition, and the Barnes & Noble (BKS.N) Nook. In
the "emerging devices" category, AT&T brought about 1 million
Devices such as e-readers are seen bringing in much less
monthly revenue per customer than traditional cellphone
subscriptions, analysts say. But unlike the iPhone, products
like Kindle are not subsidized by operators and therefore offer
solid profit margins.
"I don't want to overstate the value of it, but it's a very
high profit margin business," said Piper Jaffray analyst Chris
Larsen. "There is very little cost associated with the business
-- it might be a low revenue per individual user business, but
it's a high margin business."
Quarterly earnings rose to $3.01 billion, or 51 cents a
share, from $2.40 billion, or 41 cents a share, a year earlier,
when the company took charges for staff cuts and investment
losses. Its earnings matched expectations on Wall Street.
Revenue fell nearly 1 percent to $30.9 billion, which was
also in line with the average estimate of analysts polled by
Thomson Reuters I/B/E/S.
Overall expenses in the fourth quarter fell to $26 billion
from $26.2 billion, and the company said it would continue to
look at ways to improve its cost structure.
For 2010, AT&T said it would deliver "stable consolidated
revenues and stable-to-improved consolidated operating income
margins, leading to stable-to-improved earnings per share."
Its shares were up 14 cents to $25.76 cents on the New York
(Reporting by Paul Thomasch and Sinead Carew; Editing by