AT&T Tops Expectations, Adds Customers as It Folds in DirecTV
April 26 2016 - 5:22PM
Dow Jones News
By Lisa Beilfuss
AT&T Inc. logged stronger-than-expected earnings growth in
its latest quarter as the company added new customers and benefited
from its DirecTV acquisition.
AT&T has been facing fierce competition as carriers seek out
new ways to attract customers -- and retain existing ones --
without just cutting prices. Last year, AT&T moved to beef up
its video offerings with its $49 billion acquisition of DirecTV,
and earlier this year the company said it would bring back
unlimited wireless data plans for certain customers after years of
moving customers away from such plans.
With the integration of DirecTV, AT&T has been directing
customers to its DirecTV satellite service and de-emphasizing its
old U-Verse service. In the first quarter, the company reported
328,000 in U.S. DirecTV net adds. A quarter earlier, AT&T said
more people left U-Verse than joined DirecTV, leading to a loss of
26,000 households, a trend it had said would reverse.
Chief Executive Randall Stephenson attributed the company's
better-than-expected quarter largely to the DirecTV business.
Meanwhile, the company has worked to boost its presence in
Mexico, a strategy that helped it add customers in the quarter. The
company said it added about 12,000 wireless subscribers in the
first quarter, with Mexican wireless subscriptions surging 60%.
Total mobility subscribers rose 7% to 130.4 million as postpaid
subscribers edged 1.3% higher. Churn held steady at 1.4%. By
contrast, Verizon Communications Inc. last week reported a
first-quarter loss of about 8,000 postpaid phone customers, while
T-Mobile earlier Tuesday said mainstream phone additions declined
12% from a year earlier.
In all, AT&T reported a quarterly profit of $3.89 billion,
up from $3.34 billion a year earlier. On a per-share basis,
earnings slipped to 61 cents from 63 cents, due to a higher share
count. Excluding merger related costs and a gain on spectrum
transfers, among other items, earnings per share rose to 72 cents
from 65 cents in the year-ago quarter.
Revenue climbed 24% to $40.54 billion. Analysts projected 69
cents in adjusted earnings per share and $40.47 billion in sales,
according to Thomson Reuters.
AT&T said it is on track to meet its previously issued
targets for the year.
Shares in the company, up 10% since the start of the year, edged
1.4% lower in after-hours trading.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
April 26, 2016 17:07 ET (21:07 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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