By Chelsey Dulaney
AT&T Inc. on Thursday reported better-than-expected adjusted
earnings growth in the second quarter, though revenue narrowly
missed expectations as foreign-exchange impacts weighed.
Shares gained 2.4% in after-hours trading.
The Dallas telecom giant is attempting to diversify its business
with its $49 billion acquisition of DirecTV. Announced last May,
federal regulators are now poised to approve the deal after a
review process that lasted more than 12 months.
The acquisition will make AT&T the nation's largest
pay-television provider at a time when companies are navigating
huge shifts in television as video consumption moves online.
Meanwhile, AT&T's subscriber growth has weakened recently as
it faces greater competition from smaller rivals such as T-Mobile
U.S. Inc. and Sprint Corp.
In the latest quarter, AT&T added 410,000 mainstream
wireless subscribers, down sharply from the 1.03 million it added a
year earlier. Much of AT&T's growth has been driven recently by
tablet subscribers, which are generally less lucrative than phones.
AT&T said total wireless net additions were 2.1 million for the
quarter.
"These results reaffirm our transformation strategy," said Chief
Executive Randall Stephenson in a news release.
AT&T said its churn, or the rate at which postpaid wireless
customers left its network, was 1.01%, compared with 0.86% a year
earlier.
Overall, AT&T reported a profit of $3.04 billion, or 58
cents a share, down from a profit of $3.55 billion, or 68 cents a
share, a year earlier. Excluding items, per-share earnings grew to
69 cents a share from 62 cents a share a year earlier.
Revenue edged up 1.4% to $33.02 billion.
Analysts polled by Thomson Reuters had forecast 63 cents a share
in earnings on $33.04 billion in revenue.
Revenue in the wireless business grew 2.1% to $18.3 billion,
while revenue from the wireline business fell 2.9% to $14.2
billion.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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