AT&T tanked almost 7 percent Wednesday after reporting its third quarter earnings and revealing its DirecTV division is bleeding subscribers.
Here’s how the company did compared with what Wall Street expected:
- Earnings: 90 cents per share vs. 94 cents expected, according to Refinitiv
- Revenue: $45.74 billion vs. $45.65 expected, according to Refinitiv
- Postpaid phone net adds: 69,000 vs a net loss of 22,000 expected, according to FactSet
The company’s satellite TV division DirecTV reported a net loss of 359,000 subscribers for the quarter. Analysts had expected AT&T to shed 245,000 satellite subscribers, according to FactSet. It lost 251,000 in the same period last year.
The division’s direct-to-consumer streaming play, DirecTV Now, added just 49,000 subscribers during the period. That’s significantly lower than the 296,000 subscribers DirecTV Now added last year and the well below the 287,000 net customers analysts were predicting, according to FactSet.
The second-largest U.S. wireless carrier has been reducing its dependency on the phone business in favor of a growing media business, stamped by a $85 billion acquisition of Time Warner earlier this year. AT&T spent $50 billion in 2015 to acquire DirecTV.
But viewers continue to abandon pricey TV packages in favor of cheaper streaming video services like Netflix and Hulu.
The new WarnerMedia segment, which includes Turner and premium TV channel HBO, reported revenue of $8.2 billion during the quarter. It did not provide a year-ago figure.
AT&T closed its purchase of Time Warner on June 14, though it still faces a court battle against the U.S. Department of Justice, which is arguing that AT&T-owned DirecTV would use Time Warner content to raise costs for pay TV rivals. A U.S. appeals court said last week it will hear oral arguments on Dec. 6 for the Justice Department’s appeal against the merger.
AT&T said earlier this month it plans to launch a streaming service to rival Netflix next year.
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