AT&T's first quarter earnings were in line with expectations as the company added 2.7 million net U.S. wireless customers and solid gain of smartphone additions.
The results come a day after Verizon reported earnings that were better than expected. AT&T is currently digesting its acquisition of Time Warner and paying down a heavy debt load. AT&T said it cut net debt by $2.3 billion in the first quarter to $169 billion with a target of $150 billion by the end of the year.
AT&T reported first quarter earnings of 56 cents a share on revenue of $44.8 billion, up 18 percent from a year ago. Adjusted earnings were 86 cents a share, which matched Wall Street estimates, but revenue was lighter than expected.
For AT&T, the plan is to expand its media plan via Time Warner, branch out into advertising and build its 5G network.
Mobility is growing, but AT&T video losses are hurting the communications unit overall. AT&T said it added 179,000 net postpaid smartphone additions with a phone churn of 0.93 percent. Wireless service revenue was up 2.9 percent in the first quarter.
Consider the following moving wireless parts where AT&T reported:
- 204,000 postpaid net losses with losses in tablets offsetting gains in wearables and phones.
- 80,000 postpaid phone net adds.
- 179,000 postpaid smartphone net adds.
- 428,000 tablet and other branded computing device net losses.
- 96,000 prepaid net adds.
- 85,000 prepaid phone net adds.
- 63,000 prepaid smartphone net adds.
- 3.1 million connected device net adds.
- 253,000 reseller net losses.
Like Verizon, AT&T's wireless connections are bolstered by the addition of wearable devices.
Other key points:
- AT&T said its FirstNet deployment is halfway done and 5G is in parts of 19 cities.
- The company had 22.4 million premium TV subscribers with 544,000 net losses in the quarter.
- AT&T said that it had 1.5 million over-the-top subscribers with 83,000 net losses in the first quarter.
- Xandr, AT&T's advertising unit, saw revenue grow 26 percent in the quarter due to the acquisition of AppNexus. AT&T said that it is using data and analytics to optimize Time Warner's Turner unit advertising.