AT&T Inc. on Thursday reported third-quarter profit that topped analyst expectations and raised its outlook for the year.
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AT&T counted 289,000 net postpaid wireless additions and 466,000 prepaid net additions. This is the first quarter that the company will report its results after the DIRECTV (DTV) acquisition.
We have a $38 price estimate for AT&T, which is about 10% ahead of the current market price. Competitors like T-Mobile USA (NYSE:TMUS) have highlighted their postpaid phone subscriber growth as a barometer of their business to show they are adding high-value customers.
Record 1.6 million connected device net adds including 1 million connected cars. Business wireless postpaid churn rate was 1.05% compared with 0.84% in the year-ago quarter. Total service revenues dipped 2 percent to $15.09 billion.
AT&T’s U-Verse broadband business saw subscribers slightly fall to 14.3 million users, down from 14.5 million users during the same period previous year. While a portion of this operating margin increase came from better cost management, a significant part of the improvement is likely transitory.
Stephenson added that he expects DirecTV to pick up further momentum as AT&T’s sales and installer employees complete their training as it relates to DirecTV. Stephens also noted that AT&T recently negotiated a new contract with Viacom that covered both DirecTV and U-verse, and he implied it was a better deal than either alone had with the programmer. The company also launched an expanded NFL Sunday Ticket streaming service for consumers who can not receive DirecTV satellite service.
AT&T had previously stated it expected to post more than 2 million net connections to its mobile division for Q3.
The nation’s second-largest wireless carrier said it added 2.5 million AT&T wireless customers and 26,000 new DirecTV subscribers.
In the previous quarter, the company reported net income of $3.0 billion or $0.58 per share, lower than $3.5 billion or $0.68 per share in the year-ago quarter.
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“With our DirecTV merger having closed on July 24, 2015, we want to make an important clarification for investors heading into our earnings announcement on Thursday”, an AT&T spokesman said, in a statement. Following the completion of the purchase, the director now owns 2,404 shares in the company, valued at approximately $79,163.72.
