AT&T’s Q1: 2.7 Million iPhones, 1.9 Million New Subs and a Nasty Charge

Reporting first-quarter earnings this morning, AT&T said it added 1.9 million new wireless subscribers during the period (see chart below; click to enlarge).

It was the biggest first-quarter gain in the company’s history and an impressive achievement, but it was undermined by a large health-care expense. A $995 million charge related to the new federal health-care law dragged AT&T’s first-quarter earnings down 21 percent. Even the 2.7 million iPhones AT&T activated during the period couldn’t offset the expense.

Pity. Because excluding that charge, AT&T would have earned 59 cents a share, five cents more than the Street had been looking for.

For the quarter, AT&T (T) posted revenue of $30.65 billion and profit of $2.48 billion, or 42 cents a share, well below the $3.13 billion, or 53 cents a share, the carrier reported a year earlier. A bit of a miss since the Street had been expecting earnings of 54 cents a share on $30.73 billion in revenue.

Still, as I noted earlier, the company’s wireless division is doing quite well. Sales there rose 8.2 percent to $13.89 billion, bringing the company’s total wireless subscriber base to 87 million. Not bad, considering that Verizon (VZ), the nation’s largest wireless carrier, claims about 91 million customers.