AT&T, the telecommunications giant, reported on Wednesday that its fourth-quarter profit fell from a year ago but the figures were clouded by changes to the way it accounts for sales of the iPhone.
The company said net income for the fourth quarter was $2.4 billion or 41 cents a share, compared to $3.1 billion, or 51 cents a share, in the period a year earlier.
However, about a nickel of that difference was the up-front fee that AT&T pays for each iPhone it sells, rather than spreading that cost over time. AT&T started to install that accounting change this summer with the release of Apple’s latest iPhone model.
More broadly, AT&T reported mixed financial results for the fourth quarter. The company benefited by continued growth in the wireless business, and faced declines in the landline business.
Revenue for the fourth quarter was $31.1 billion up slightly from $30.4 billion in the quarter a year ago.
Excluding one-time charges, the company had a profit of 64 cents a share. On that basis, a consensus of Wall Street analysts had projected the company would earn 65 cents a share.
For the year, the company earned $12.9 billion, or $2.16 a share, up from $11.95 billion, or $1.94 a share, for 2007. Revenue rose 4.3 percent to $124 billion.
In the wireless side of its business, AT&T said it added 2.1 million subscribers in the quarter, compared with 2.7 million in the quarter a year ago, a drop in part attributable to the fact that most Americans already have phones and service plans.
But AT&T saw the revenue that it earned from each subscriber grow to $59.59, up from $57.35 a year ago. The growth came largely from increasing use of data.
On the landline side of the business, the company lost 1.56 million access lines in the fourth quarter and 6 million overall in 2008. Those figures are consistent with long-term trends as consumers and business move away from landlines and toward wireless products and services.
AT&T continued to see increased growth of its U-verse television service, which gained 264,000 subscribers in the fourth quarter compared with an increase of 105,000 a year ago. The company gained 236,000 broadband customers in the fourth quarter, down from 396,000 a year ago — a fall that is in part attributable to the challenging economy.
Ed Snyder, an industry analyst with Charter Equity Research, said the performance was more-or-less inline with Wall Street’s expectations.
“The wireline business was weak but the wireless business was a little better than expected,” he said. “No big surprises.”