DirecTV Adds 214,000 Subscribers in the Fourth Quarter
Parent company AT&T disappoints Wall Street with revenue slightly below the predictions of analysts.
AT&T said Tuesday it ended the fourth quarter with 25.4 million video subscribers, slightly down year-over-year as DirecTV added 214,000 new users but U-verse lost 240,000.
The telecom giant said the slight decline in TV subs is to be expected as it shifts its marketing from U-verse to satellite provider DirecTV, which it acquired in the summer for $67 billion, including debt.
AT&T said its "video entertainment" segment saw revenue of $9.25 billion, up from just $1.81 billion with the massive growth coming courtesy of the DirecTV acquisition, which made AT&T the world's biggest operator of pay television.
AT&T's "entertainment group," which includes TV, high-speed Internet and other services reported revenue of $13 billion, up from $5.6 billion a year ago, and operating income of $1.5 billion, reversing a loss of $296 million a year earlier. Most of the improvements can be attributed to DirecTV.
Overall, AT&T posted adjusted earnings per share of 63 cents, which was about what analysts predicted, but the company disappointed Wall Street by reporting 22 percent revenue growth to $42.12 billion, a bit shy of the $42.75 billion analysts had forecast.
AT&T said it ended the fourth quarter with 55 million wireless phone subscribers, down from 55.44 million a year ago.
Shares of AT&T rose 1 percent Tuesday to $35.40 but were falling 2 percent after the closing bell when its financial results were disclosed.