(Reuters) – AT&T Inc on Wednesday reported quarterly revenues and new wireless subscribers that fell short of Wall Street expectations, sending shares down nearly 3 percent, as its focus shifted to paying down debt from boosting its customer base.
An AT&T logo is pictured in Pasadena, California, U.S., January 24, 2018. REUTERS/Mario Anzuoni
The second largest U.S. wireless carrier by subscribers, which spent $85 billion to acquire media company Time Warner, has turned its focus to paying down debt, pulling back on price promotions for phone and television entertainment plans and sacrificing new customer gains in the process.
Shares of AT&T declined 2.9 percent to $29.80 before the bell.
Its entertainment segment, which includes satellite TV provider DirecTV, has been in continuous decline. It lost more subscriber during the quarter as viewers shifted to cheaper internet TV services, just not those owned by AT&T.
DirecTV Now, AT&T’s cheaper streaming service, lost more subscribers than analysts expected due to fewer promotions.
The carrier gained a net 134,000 phone subscribers who pay a monthly bill, less than analysts’ estimates of 208,000, according to research firm FactSet. AT&T has 153 million phone subscribers.
It lost 403,000 satellite TV subscribers, more than the estimate of 328,000 customers who left, according to research firm FactSet. AT&T also shed 267,000 DirecTV Now customers.
The new WarnerMedia segment, which includes Turner and premium TV channel HBO, reported revenue of $9.23 billion during the quarter, beating estimates of $9.05 billion, according to IBES data from Refinitiv.
Net income attributable to AT&T fell to $4.86 billion, or 66 cents per share, from $19.04 billion, or $3.08 per share, a year earlier, when the company benefited from the U.S. tax overhaul.
Excluding items, the company earned 86 cents per share, in line with estimates.
Total revenue rose 15.2 percent to $47.99 billion but missed analysts’ estimates of $48.5 billion.
Reporting by Akanksha Rana in Bengaluru and Sheila Dang in New York; Editing by Maju Samuel and Jeffrey Benkoe