AT&T's 3Q Revenue Shrinks More Than Expected

By Matt Egan Features FOXBusiness


Blue-chip telecom giant AT&T (T) revealed on Thursday it suffered a 71% tumble in third-quarter net income amid a steeper-than-expected decline in revenue.

Continue Reading Below

Dallas-based AT&T said it earned $3.62 billion, or 61 cents a share, last quarter, compared with a profit of $12.3 billion, or $2.07 a share, a year earlier. Analysts had called for EPS of 61 cents.

Revenue shrank 0.3% to $31.48 billion, missing the Street’s view of $31.6 billion. Operating margins expanded to 19.8% from 17.2%.

In the wake of the results, shares of AT&T slid 2.03% to $28.50 ahead of Thursday’s open. AT&T’s stock was off 1% on the year as of Wednesday’s close.

“Mobile broadband growth continues to be robust, execution was strong across the business, and we delivered another solid quarter,” CEO Randall Stephenson said in a statement. “The next waves in the mobile Internet revolution represent tremendous growth potential, and we are laying the groundwork required for that future.”

AT&T, which is the No. 2 U.S. mobile service provider, said it gained 319,000 subscribers last quarter, missing consensus forecasts from analysts, but giving it 100.7 million customers. Wireless data revenue jumped 18% last quarter, while service revenue grew 4.3% to $14.26 billion.

Continue Reading Below

The company sold 4.8 million smartphones last quarter, including 2.7 million Apple (AAPL) iPhones that were sold. Sales of devices powered by Google’s (GOOG) Android operating system and other non-iPhones represented almost half of its new phone sales.

AT&T said its voice revenue shrank 10.5% to $6.24 billion, while data revenue was up 7.6% to $7.47 billion.

AT&T said it is also continuing to “work toward a successful completion” of its planned $39 billion acquisition of T-Mobile USA. That deal was blocked by the Department of Justice at the end of August for antitrust reasons.

Rival Verizon (VZ) is scheduled to release results on Friday, while Sprint Nextel (S) expected to announce its results next week.

What do you think?

Click the button below to comment on this article.