AT&T Adds 2.7 Million Wireless Customers, But Lower Device Sales Hurt Revenue

AT&T Inc. added twice as many wireless customers as expected in the first quarter, as rival Verizon Communications Inc. lost more customers than it gained for the first time, but the telecommunications giant's revenues missed expectations in a Tuesday report as sales of wireless equipment hit an all-time low. AT&T reported net income of $3.5 billion, or 56 cents a share, on revenue of $39.4 billion. After adjusting for amortization and other factors, the company claimed adjusted earnings of 74 cents a share. Analysts expected on average for AT&T to report adjusted earnings of 74 cents a share on revenue of $40.5 billion, according to FactSet. AT&T said it added 2.7 million wireless customers in the quarter, well above analysts' average estimate of 1.3 million wireless net adds, with AT&T crediting the performance largely to prepaid phone plans and connected devices. However, the company's sales total dropped from $40.5 billion in the year-ago quarter because of its lowest wireless equipment sales on record, suggesting new customers were bringing their own phones or buying cheaper models. AT&T also updated its full-year guidance to remove its revenue forecast, explaining that it "is no longer providing consolidated revenue guidance primarily due to the unpredictability of wireless handset sales." AT&T stock, which has declined 3.5% in the past three months as the S&P 500 index has gained 3.3%, bounced between small gains and losses in after-hours trading.