AT&T Inc. (NYSE: T) has missed market estimates for the third quarter of FY 17 as the company lost video subscribers to traditional, and online TV competitors while fewer of their existing customers upgraded their devices ahead of Apple Inc’s launch of the iPhone X. AT&T has reported net income of $3.0 billion for the quarter ended Sept. 30, down from $3.3 billion, in the year-earlier period. As a result, T stock dipped 3.9 percent today (as of 1:45PM EDT; Source: Google finance).
AT&T Inc has reported the adjusted earnings per share of 74 cents in the third quarter of FY 17, missing the analysts’ estimates for the adjusted earnings per share of 5 cents. The company had reported the adjusted revenue of $39.7 billion in the third quarter of FY 17, beating the analysts’ estimates for revenue of $40.1 billion.
Moreover, AT&T Inc has lost 89,000 U.S. video subscribers in the third quarter, slightly fewer than the 90,000 it said earlier this month in a regulatory filing, due to intense competition in the traditional pay-TV and online market and the impact of recent hurricanes.
In the same filing, AT&T Inc has also reported 900,000 fewer handset equipment upgrades than in the year-ago period, which had negatively impacted the wireless equipment revenue.
Analysts have said many consumers are putting off upgrades until the fourth quarter when Apple’s iPhone X is expected to launch.
Meanwhile, T has extended by a “short period” the deadline to close its proposed deal to acquire Time Warner Inc. This is due to the fact that the company needs time to get the required regulatory approvals for the deal. The deal had a termination date of Oct. 22nd. AT&T still expects to close the deal by the end of the year. Once it’s done, the company plans to reorganize the company under separate leaders, one for the telecommunications unit and the other for media. Further, AT&T’s $85.4 billion acquisition of Time Warner is expected to give it control of cable TV channels HBO and CNN, film studio Warner Bros and other coveted media assets. The company’s main businesses have stalled or are in decline. Time Warner offers AT&T Inc a chance to combine some of Hollywood’s best content with its phone and internet service, as the company is already starting to do.