Hey, we got bigger!
AT&T raised its annual profit forecast on stronger subscriber gains in its mobile business and in its newly acquired DirectTV satellite television service.
The company said it expected per-share earnings to rise to $2.74 for the year, up from earlier estimates of $2.68. Shares rose 2 percent to $34.65 in after-hours trading.
The nation’s second-largest wireless carrier reported earnings of nearly $3 billion, or 50 cents per share, on revenue of $39.1 billion for its third quarter. Excluding one-time items, AT&T’s earnings per share of 74 cents beat analyst projections of 69 cents per share, but revenue fell short of the $40.42 billion expectations, according to Thomson Reuters.
The company warned it would miss revenue goals and took the unusual step of alerting the investment community about what it considers to be the “inflated” Wall Street projections, ahead of reporting its third-quarter results.
AT&T completed its $49 billion acquisition of satellite TV provider DirecTV on July 24, which means it can’t count revenue on its balance sheets until July 25. Many of the revenue estimates for DirecTV came in higher, because they sweep in the full month’s revenues. AT&T said that adding in the revenue for the entire month would have pushed its revenue figure to $41.2 billion, which would have exceeded analyst expectations.
The carrier said this would be a one-time event.
AT&T previously announced it added two million new subscribers in the quarter, thanks to a growing number of tablet and connected car customers. It is facing intense competition for phone subscribers from T-Mobile, which in the June quarter added 2.1 million customers — including those with good credit who pay their bills at the end of every month.
AT&T gained phone customers overall, but lost postpaid phone customers for the quarter. Postpaid customers, those who pay their bill at the end of the month, are seen as the most lucrative customers, though the distinctions are beginning to blur as prepaid users begin to spend more on smartphone plans.
The company did say it had its best quarter in two years in its Cricket and GoPhone prepaid business as it gained customers and saw average bills increase.
“We now have integrated solutions that are unlike any competitor in the market,” said AT&T Chairman and CEO Randall Stephenson in a statement. “With our national wireless and video capabilities, as well as our extensive broadband network, we now have assets that make us a unique competitor and the first scaled, fully-integrated U.S. service provider.”
Update: Corrected earnings per share comparison and adds more detail on revenue figures.
This article originally appeared on Recode.net.
Reference Link:
https://www.vox.com/2015/10/22/11619956/att-boosts-profit-forecast
