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A few days ago, Verizon released their quarterly report, and the news was bittersweet: they sold a ton of iPhones, but were bit by the cost of subsidizing them. Today, AT&T released their own quarterly report, and they, too, felt the sting of high iPhone subsidies.

First, the good: the company sold 7.6 million iPhones in the last quarter, meaning that AT&T made up fully 20% of the phone’s total fourth quarter sales. The iPhone also made up 80% of AT&T’s total quarterly smartphone sales, handily beating out competing Android, Windows Phone, and other competing devices; and even accounted for 66% of AT&T’s total phone sales in the quarter.

This means that, despite losing exclusivity in 2011, AT&T remains the top carrier for the iPhone in the United States. Its nearest competitor, Verizon, only managed to sell 4.2 million iPhones last quarter. Third place Sprint has yet to report its sales, but they will likely come in below Verizon’s numbers.

But then, there’s the bad: like Verizon before it, AT&T also reported that the high cost of subsidizing the iPhone meant that, despite the stellar numbers, it actually took a hit in revenue for the quarter.  According to AT&T, they experienced a loss of $6.68 billion, or $1.12 per share, in the last quarter. The loss cannot be completely blamed on the iPhone — AT&T also suffered under pension costs and from the disastrous attempt to buy T-Mobile — but it’s clear that all those iPhones cost AT&T a pretty penny. In fact, the adjusted net income for the quarter was 42 cents per share, a penny less than Wall Street expectations.

Also like Verizon before it, these short-term losses have to be considered in terms of their long-term gains. Those 7.6 billion phones are now locked into 2 year contracts with AT&T, and many of them will probably pay extra to upgrade to the iPhone 5 later this year.

[via The Washington Post]