AT&T’s Revenue Suffers as Cord-Cutters Hurt

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AT&T
Inc.’s


T 0.57%

quarterly income declined as development within the firm’s streaming video service wasn’t sufficient to offset losses of extra worthwhile wi-fi and satellite tv for pc accounts.

The firm’s streaming DirecTV Now service added 312,000 subscribers to achieve almost 1.5 million within the first quarter. The new additions greater than lined the 188,000 satellite-TV prospects it misplaced, although the shift to the low-price on-line service has pressured the Dallas firm’s outcomes.

Revenue in its video enterprise fell by $660 million from a 12 months in the past to $eight.36 billion within the quarter.

“We’re going to continue to see new challenges in the satellite, in the linear pay-TV models we’ve talked about,” finance chief

John Stephens

stated on a name with analysts. The firm has warned that cord-cutting would sap the standard pay-TV market and used that argument to defend its proposed takeover of media firm

Time Warner

Inc.

Comcast
Corp.

, which additionally reported outcomes Wednesday, suffered its fourth straight quarter of cable-TV subscriber losses. It misplaced 96,000 prospects, in contrast with a achieve of 42,000 within the prior-year quarter.

AT&T additionally misplaced 22,000 so-called postpaid cellphone prospects within the March quarter after reporting a surge of cellphone prospects on the finish of final 12 months. Rival Verizon Communications Inc. on Tuesday said it lost 24,000 of these worthwhile cellphone accounts within the first quarter.

“We’ve seen some moderating of the competitive environment over the last few months,” Mr. Stephens stated of the U.S. wi-fi market. Both AT&T and Verizon launched limitless information plans in early 2017 to stem defections to

T-Mobile US
Inc.

and

Sprint
Corp.

, which gives such plans.

AT&T added 192,000 pay as you go prospects, who purchase telephones loaded with information and name minutes forward of time. Those accounts additionally are likely to generate much less income than prospects on month-to-month plans.

Investors are additionally intently following AT&T’s continued protection of its $85 billion Time Warner acquisition. The U.S. Department of Justice is difficult the deal on antitrust grounds. The trial is sort of over, with closing arguments anticipated subsequent week and a federal choose’s ruling weeks later.

“Based on the court’s determination, we stand ready to close,” Mr. Stephens stated. The firm continued to spend on the potential deal, with Time Warner and different merger prices totaling $67 million within the quarter.

AT&T’s income took successful after the corporate reclassified some charges collected beneath the federal Universal Service Fund, amongst different gadgets. Under new accounting guidelines, its first-quarter income totaled $38.04 billion, in contrast with $39.37 billion within the year-ago quarter. On a comparable foundation, the corporate stated income fell 1.1% to $38.9 billion.

Overall revenue reached $four.7 billion, or 75 cents a share, in contrast with $three.5 billion, or 56 cents a share, in the identical quarter final 12 months.

Shares fell four.four% to $33.65 in after-hours buying and selling.

Write to Austen Hufford at [email protected] and Drew FitzGerald at [email protected]

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