AT&T Misses Mobile Customer EstimatesBy
CEO plans to bundle films, TV shows with phone, web services
Earnings match analysts’ estimates, while revenue falls short
It’s easy to see why AT&T Inc. is so eager to complete the $85.4 billion purchase of Time Warner Inc.
The phone giant gained 117,000 new wireless customers last quarter, meeting analysts’ estimates while trailing the growth reported by Verizon Communications Inc., T-Mobile US Inc. and Sprint Corp. The owner of DirecTV, AT&T also said Tuesday it continued to lose pay-TV customers in the third quarter.
AT&T is counting on Time Warner to provide new opportunities. The company’s main businesses have stalled or are in decline. Time Warner offers AT&T a chance to combine some of Hollywood’s best content with its phone and internet service, as the company is already starting to do.
“This expansion will make our bundled video, mobile and broadband services even more compelling,” Chief Executive Officer Randall Stephenson said in the statement.
AT&T added 102,000 regular monthly wireless customers and 15,000 business users in the third quarter, the company said in an addendum to its earnings statement. That was in line with the 117,000 analysts had projected. The company said it was able to contain customer defections during the period.
The company’s traditional pay-TV business shrank by about 390,000 customers last quarter -- losses that were partly offset by signups for a new, lower-priced online video offering. Including the less expensive DirecTV Now, the service lost 90,000 customers.
On Monday, T-Mobile US reported signing 817,000 new customers last quarter, outpacing competitors with offers including free Netflix. AT&T has countered with plans that include free HBO and DirecTV Now, its online TV service. Last week, Verizon reported signing 603,000 new regular monthly customers, beating Wall Street projections. Sprint added 168,000, topping expectations.
AT&T fell 2.4 percent to $34.01 at 9:45 a.m. in New York. The shares had declined 18 percent this year through Tuesday.
With Time Warner, AT&T will own top programming like CNN, TNT and HBO, and is continuing talks with the U.S. Justice Department on possible conditions for approval, according to people familiar with the discussion.
Chief Financial Officer John Stephens on Tuesday said AT&T still expects to close the deal by the end of the year. Once it’s done, CEO Stephenson plans to reorganize the company under separate leaders, one for the telecommunications unit and the other for media.
AT&T posted third-quarter earnings of 74 cents a share excluding some items, in line with analysts’ forecasts. Sales fell to $39.7 billion, missing projections.