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AT&T hailed a “blowout quarter” on the back of record smartphone sales in Q4, despite a series of charges forcing the operator to post a hefty quarterly net loss.

The US number-two set a new record with 9.4 million smartphones sold in Q4, nearly double the number it sold in the third quarter and 50 percent more than the previous quarterly record. Smartphone sales – which included 7.6 million iPhone activations - represented more than 80 percent of AT&T’s postpaid device sales in the quarter.

At the end of the quarter, 56.8 percent of AT&T's 69.3 million postpaid subscribers had smartphones, up from 42.7 percent a year earlier. Total mobile subscribers reached 103.2 million, representing quarterly net additions of 2.5 million.

"We had a tremendous year in terms of execution, and we have excellent momentum across our growth platforms," said Randall Stephenson, AT&T’s chairman and CEO. "This was a blowout quarter for sales. Our network performance is at a high level on voice quality and best-in-class mobile download speeds."

However, the operator posted a US$6.7 billion net loss (US$1.12 per diluted share) on a series of hefty impairments, including a one-time charge for termination of the T-Mobile USA acquisition. Excluding these charges, adjusted earnings per share was US$0.42 the firm said. This compares to reported net income of US$1.1 billion, or US$0.18 per diluted share, a year ago, which was adjusted to US$0.55 per share with excluded items.

Consolidated revenues for the quarter came in at US$32.5 billion, up US$1.1 billion, or 3.6 percent, versus the year-earlier period and ahead of most expectations. This included a 10 percent rise in wireless revenue (to US$16.7 billion) and a 19.4 percent uplift in revenue from wireless data (to US$5.9 billion). However, operating expenses rose to US$41.5 billion versus US$29.3 billion a year earlier, while the operating loss was US$9.0 billion, compared to operating income of US$2.1 billion last year.

Net income for the full year 2011 came in at US$3.9 billion versus US$19.9 billion in 2010. Full year revenue was US$126.7 billion, up 2 percent from US$124.3 billion.

For the current year, AT&T expects continued consolidated revenue growth, including postpaid wireless ARPU growth around 2 percent for the year. The company also expects to expand consolidated and wireless margins while keeping wireline margins stable. “Achieving these targets will lead to mid-single-digit or better earnings growth with an opportunity to accelerate earnings growth beyond 2012,” it said in a statement.

"Looking ahead, we start 2012 with the best visibility we've had in some time, and we're well positioned to deliver solid results - including continued revenue growth with margin expansion, solid earnings per share growth and strong cash flow," Stephenson added.