Its shares fell 3 percent as some investors were also disappointed by the company's 2011 expectation for earnings per share growth in the mid-single-digit percentage range, according to Piper Jaffray analyst Christopher Larsen.
"The guidance was lower than what people were looking for," Larsen said, noting that investors were worried about how much customer growth AT&T had baked into the estimate.
AT&T said it added 400,000 net contract customers in the fourth quarter compared with the average expectation for almost 504,000 from eight analysts contacted by Reuters.
On the plus side, Larsen said AT&T's addition of 442,000 customers using tablet computers like Apple's iPad were much higher than he had expected. AT&T also cited sales of tablets based on Google Inc's popular Android software.
"That's one of the things they're doing," Larsen said. "They're not just about iPhones. They're selling a lot of other devices."
On Tuesday, AT&T's biggest rival Verizon Wireless reported 872,000 new contract customers. Verizon Wireless said on January 11 that it starts selling iPhone in February, ending AT&T's more than three years of exclusive rights to the popular device.
However, AT&T noted that it still activated 4.1 million iPhones in the quarter, despite widespread expectations that Verizon Wireless would start selling the device early in 2011.
AT&T, the No. 2 U.S. mobile operator on Thursday reported a profit of $1.09 billion, or 18 cents per share compared with a profit of $2.7 billion, or 46 cents per share in the same quarter the year before.
But excluding unusual items, AT&T earned 55 cents per share compared with the average analyst estimate for 54 cents a share according to Thomson Reuters I/B/E/S.
Operating revenue rose 2.1 percent to $31.36 billion from $30.71 billion in the year-ago quarter. On average analysts were expecting revenue of $31.47 billion, according to a poll from Thomson Reuters I/B/E/S.
AT&T said it expects consolidated revenue to grow this year but did not give a specific target.
It said earnings per share growth would be boosted by improvements in both wireless and wireline profit margins.
It said capital spending for the year would be in the low-to-mid $19 billion range and wireless spending increases would be offset by lower wireline capital expenses.
AT&T shares fell to $27.79 in premarket trading after closing at $28.73 on the New York Stock Exchange.
Verizon Wireless is a venture of Verizon Communications and Vodafone Group Plc.
(Reporting by Sinead Carew; editing by Derek Caney, Dave Zimmerman)
Source:http://news.yahoo.com/
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