AT&T misses on EPS, revenue in Q3; big U-verse adds

A couple of swings and misses for AT&T today after the telco reported Q3 EPS and revenue that missed expectations.

On the bright side, the company saw big gains in subscribers for both U-verse TV and U-verse Internet.

Earnings per share were 63 cents, missing Wall Street’s consensus estimate by a penny and down 3 cents from a year ago. Revenue came in at $33 billion, missing forecasts by $240 million, but up 2.5% Y/Y.

But AT&T said it added more than 2 million wireless and wireline subscribers in the quarter, a diamond in otherwise meh earnings.

Total U-verse revenues, said CFO John Stephens during an earnings call with analysts, were up nearly 24% Y/Y; with the business now a $15 billion annualized revenue stream.

The company said it added some 601,000 U-verse Internet subs, giving it about 12 million high-speed Internet subscribers.

It also added 216,000 U-verse TV subscribers to bring its total to more than 6.1 million, but the total adds for TV were actually 19% lower than the 265,000 TV adds a year ago.

A&T – like all operators – has been trying to position its Internet products at the front of its business… a high-margin, high demand product that most see as the industry’s future.

The company said its high-speed network now reaches 57 million customer locations, with two-thirds of it available at 45 Mbps speeds.

The telco said it was committed to deploying its 1 Gbps service, Gigapower, to 17 markets. It’s already deployed in Austin, Dallas and Ft. Worth.

Virtually all of U-verse TV customers, 97%, take three or four services, keeping churn down and ARPU up.

U-verse now represents nearly two thirds of consumer revenues, up from 54% a year ago. ARPU for U-verse triple-play customers continues to be more than $170.

Stephens also commented on the FCC’s decision today to pause its informal clock on AT&T’s deal to acquire DirecTV, playing down the move today.

“It doesn’t change our view that we’ll be able to get the deal done and approved by the first half of 2015,” he said. “Stopping the clock is not an unusual or rare occurrence.”

The FCC said bickering over who would be allowed to see carriage agreements between AT&T and DirecTV and various content owners was the cause for the delay.

Stay tuned.

Jim O’Neill is Editor of Videomind and Principal Analyst at Brightcove. You can follow him on Twitter @JimONeillMedia and on LinkedIn