AT&T beats Q2 earnings expectations

The company posted its lowest postpaid phone churn in its history.

AT&T reported its second quarter financial results Tuesday, posting earnings that beat market expectations and revenue in line with estimates.

The company reported adjusted earnings of 79 cents per share on revenue of $39.8 billion. A year prior, the company reported 72 cents per share on revenue of $40.52 billion. Revenue was down year-over-year primarily due to declines in legacy wireline services and consumer mobility.

Wall Street was expecting earnings of 73 cents per share on revenue of $39.79 billion.

AT&T highlighted its 2.8 million wireless net adds, which included 2.3 million from the US driven by prepaid and postpaid connected devices.

The company also touted 112,000 IP broadband net adds for the quarter. It now has more than 5.5 million AT&T Fiber customer locations.

"In a quarter where our competitors used promotions aggressively, we added more than 500,000 branded smartphones to our base and more than 100,000 IP broadband subscribers, achieved record EBITDA wireless margins and had the lowest postpaid phone churn in our history," CEO and chairman Randall Stephenson said in a statement.

Meanwhile, AT&T lost 199,000 pay-TV subscribers in the quarter. By comparison, AT&T lost 233,000 subscribers in Q1. The company said DIRECTV NOW gains helped offset the decline in traditional TV subscribers while total video subscribers was essentially flat year-over-year.

In his statement, Stephenson said he expects AT&T's Time Warner deal to close by year-end "and further transform the company." AT&T is reportedly now in negotiations with the Justice Department of Justice over the deal.

This article was corrected to note that AT&T lost 233,000 subscribers in Q1, not 750,000.