AT&T Q3: Miss on earnings, revenue; reports 2 million net cellular adds

It wasn't all singing and dancing at AT&T on Wednesday, after the company reported less-than-expected earnings for its fiscal third-quarter.

AT&T shares were down more than 2 percent after it published its third-quarter earnings after the bell on Wednesday.

The nation's second largest mobile provider reported a net income of exactly $32.96 billion, or 58 cents per share. Adjusted earnings were 63 cents per share. (statement).

Wall Street was looking for earnings of 64 cents per share on revenue of $33.24 billion.

Both earnings and revenue misses were slim, but it still concerned late traders.

The company saw wireless revenue of $18.3 billion during quarter, up 5 percent from a year ago. Postpaid churn was just shy of 1 percent, which the company said it was its "best-ever" result for the third-quarter.

AT&T also added 2 million total wireless subscribers, which the company attributed to gains in postpaid and connected devices. Postpaid customers are essentially on contract, allowing the company to generate revenue over a period of time.

The company sold 466,000 smartphones, and 434,000 postpaid tablets. 

But, for now, wireless remains at the top of the cellular giant's priority list, amounting for 56 percent of the company's revenue — even if its other ventures are ramping up in size and scale.

On its landline phone service front, AT&T had third quarter revenue of $14.6 billion, down slightly by 0.4 percent in the year-ago quarter.

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Image: AT&T

On the enterprise side of things, its strategic business services revenues, which include virtual private networking (VPN) connections, U-verse, and IP data, were up more than 14 percent. The division's revenues were up about 1.7 percent year-over-year.

Its business revenues were down by 2 percent year-over-year to $8.7 billion. 

In prepared remarks, chief executive Randall Stephenson said that the company's strategy is "on track," and things were beginning to pay off. 

Make no mistake. Verizon's earnings on Tuesday were flat with Wall Street expectations — nothing to sing or dance about. AT&T on Wednesday didn't meet up to expectations. But that said, the duopoly of the two cellular giants remains intact, with little — T-Mobile and Sprint included — doing much to shake them.

For the cellular giant's fiscal fourth quarter earnings, Wall Street is gunning for 61 cents a share on revenue of $34.66 billion.

AT&T closed down 0.3 percent on Wednesday on the New York Stock Exchange at market close. In after-hours trading, its stock was down 0.9 percent.

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Image: AT&T