AT&T Sales Grow, but Video Effort Lags

AT&T Inc. logged 23% sales growth in its latest quarter as it continues to benefit from its acquisition of DirecTV and brought in new wireless subscribers, but the company continued to fall flat in its attempt to add new video customers.

Shares in the company, up 24% this year, slipped 1.2% in after hours trading.

The telecom giant has been shifting away from its consumer roots, diversifying away from its wireless business and turning itself into a broader media company. Its $49 billion tie up with satellite TV operator DirecTV last summer has helped AT&T beef up its targeted TV and video advertising, and the company has said it plans to offer over-the-top video services later this year but details are scant.

AT&T's efforts to move beyond wireless comes as wireless carriers grapple with a competitive and promotional market. Carriers are increasingly are focusing on video for wireless data traffic, with Verizon launching its mobile video service go90 and T-Mobile offering free video streaming.

The company has been struggling to add video customers, losing 49,000 during the quarter despite DirecTV gains. AT&T said the decline, which follows a 54,000 drop in the first quarter, is because of its focus on profitability—most TV subscribers are on the higher-margin DirecTV platform.

In its wireless business, AT&T added 2.1 million customers, 1.4 million of them in the U.S. and 257,000 postpaid.

Over all AT&T reported a profit of $3.41 billion, or 55 cents a share, up from $3.08 billion, or 59 cents a share, a year earlier. Excluding amortization costs and merger-related expenses, among other items, profit per share rose to 72 cents from 70 cents.

Revenue increased 23% to $40.52 billion. Analysts projected 72 cents in adjusted earnings per share on $40.63 billion in revenue, according to Thomson Reuters.

Write to Lisa Beilfuss at [e-mail]

(END) Dow Jones Newswires

July 21, 2016 16:55 ET (20:55 GMT)

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