AT&T's share price dips despite beating expectations

 
James Nickerson
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DIRECTV gave AT&T a boost (Source: Getty)

AT&T's share price has fallen in after-hours trading after the telecoms group posted first quarter profit ahead of expectations.

Shares were trading more than 1.5 per cent lower after the results were announced.

The largest US telecoms group by market capitalisation posted adjusted earnings per share of $0.72, $0.03 ahead of expectations.

Meanwhile, revenues were reported $40.5bn for the quarter, in line with analysts' expectations, and up more than 24 per cent on the year earlier, due largely to the acquisition of DIRECTV.

The company added 328,000 DIRECTV subscribers over the three month period, higher that the average estimate, according to FactSet StreetAccount. The company bought DIRECTV for $48.5bn last year.

However, the wireless carrier lost lost 382,000 customers at its Internet and TV service U-verse. Total video subscribers were down 54,000 in the quarter.

AT&T's wireless division still accounts for the majority of its profits, but the company is moving away from selling wireless to mobile phone customers, focussing more on TV and its enterprise division.

Indeed, the company attributed the customer losses to a "focus on profitability and emphasis on satellite".

"It was a good start to the year. We had solid financial results and executed well on our strategy to be the premier integrated communications provider for businesses and consumers," said Randall Stephenson, AT&T chairman and chief executive.

"We’re seeing good momentum with our initial integrated wireless, video and broadband offers. And we’ll expand the integrated choices for customers in the fourth quarter when we launch our new video streaming services.

"Our consolidated revenues, adjusted earnings and free cash flow continue to grow as margins continue to expand. And we’re putting up these numbers even as we invest in building our Mexico wireless business. In addition, DIRECTV merger synergies are on track to reach $1.5bn or better by the end of the year."

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