AT&T Q1 mixed, but the company adds wireless smartphone subscribers

There are more than a few moving parts in AT&T's first quarter, but the company did manage to add postpaid smartphone subscribers.

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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.  
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