AT&T revenue misses Street expectations

Reuters

Wall Street

iPhone

Continue Reading Below

The No. 2 U.S. mobile provider added 319,000 subscribers in the quarter, compared with the average expectation for almost 406,000 from seven analysts whose estimates ranged from 300,000 to 800,000.

While AT&T's wireless profit margin was better than expected ,its average monthly revenue per user (ARPU) for subscribers who pay monthly bills fell short.

Stifel Nicolaus analyst Chris King said that investors will be anxious to hear whether ARPU was brought down by customers from acquired assets or from price pressure from rivals.

"If they say its a trend and they're getting competitive pressure that's not a good thing," said King, adding that AT&T's subscriber ARPU of $63.69 missed his expectation fo $64.50.

Better than expected wireless profits could likely be attributed to lower smartphone sales as customers held off on buying smartphones this quarter as they waited for the new iPhone, Mizuho analyst Michael Nelson said.

AT&T, which is looking for regulatory approval to buy T-Mobile USA, reported a drop in operating revenue to $31.48 billion from $31.58 billion in the year-ago quarter, and was shy of analyst expectations for revenue of $31.60 billion, according to Thomson Reuters I/B/E/S.

AT&T's profit of $3.6 billion, or 61 cents per share that was in line with Wall Street expectations. It compared with a profit of $12.32 billion or $2.07 per share in the same quarter the year before, when it had a big gain from an asset sale.

AT&T shares were down 73 cents at $28.36 in premarket trading.

(Reporting by Sinead Carew; editing by Gerald E. McCormick and Derek Caney)

What do you think?

Click the button below to comment on this article.