AT&T profits slide 21%

AT&T reported Wednesday (April 21) that its first quarter profits fell as one-time health care charges socked more than $1 billion from its first quarter books. However, strong sales of iPhones and the addition of 1.9 million new wireless users continued to pad the telecom giant’s wireless earnings.

On Monday, Apple reported that its earnings were up more than 90%, mainly on the strength of iPhone sales. The AT&T network is the exclusive U.S. carrier of iPhones.

In February, AT&T announced that its total capital investment in its Arkansas wireless and wireline networks from 2007 through 2009 was more than $450 million. AT&T also unveiled its wireless network investment plans for Arkansas in 2010, which include the addition of nearly 50 new cell sites and the upgrade of nearly 200 additional cell sites to 3G throughout the state.

“These investments in smart networks are enabling the innovation of today and tomorrow that will enhance economic growth and stimulate jobs,” said Ed Drilling, President of AT&T Arkansas.

The Arkansas investment is part of AT&T’s 2010 companywide upgrade to its network in the range of $18 billion to $19 billion. AT&T shares stood at $26.66 before the opening of trade on Wednesday.

For the period ended March 31, the nation’s second-largest wireless carrier reported net income attributable to common shareholders of $2.5 billion, or 42 cents a share, down 21% from from $3.1 billion, or 53 cents a share, a year ago.

Wall Street analysts, on average, expected the Dallas-based telecom to report first quarter earnings of 54 cents per share on sales of $30.7 billion. Those expectations did not include the more than $1 billion non-cash one-time tab related to AT&T’s charges for the recently passed U.S. health care reform package.

Excluding that expense, AT&T said it would have earned 59 cents a share. Overall, the company’s revenue rose by $78 million to $30.65 billion, up 0.3% from a year ago.

AT&T said the strong first-quarter results were highlighted by rapid growth in mobile broadband, further expansion of AT&T U-verse services and continued solid gains in IP-based and strategic business services.

"We’re off to a great start to the year, and our fundamental outlook for the business continues to be quite positive,” Randall Stephenson, AT&T chairman and CEO, said in a statement. “AT&T continues to set the pace in mobile broadband, the industry’s number one growth driver, and our wireless business continues to perform at a high level, with improved margins, lower churn and overall revenues growing at a healthy clip."