AT&T, Inc. Misses Q2 Estimates; Shares Fall 1.9%

AT&T shares fell as much as 1.9% in after-hours action, as second-quarter results fell short of analyst targets.

Jul 23, 2014 at 6:48PM
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Shares of telecom titan AT&T (NYSE:T) fell as much as 1.9% after hours, following the release of results for the second uarter of 2014.

AT&T saw revenues rise 1.6% year over year to $32.6 billion. Adjusted earnings fell 7.5%, landing at $0.62 per share.

Analysts were looking for more, with consensus estimates pointing to earnings of $0.63 per share on roughly $33.2 billion in top-line sales.

The company added 700,000 net new subscribers in the postpaid wireless segment, citing low customer churn as a growth driver. The company actually added 1.6 million net postpaid smartphones in the quarter, replacing the loss of 900,000 feature phone users.

Wireless operating margins came in at 24.1%, down from 27.1% in the year-ago period. The popular AT&T Next upgrade program is an effective revenue booster but puts pressure on operating margins.

On the hardwired side, AT&T added a net of 488,000 new broadband subscribers and 190,000 U-Verse TV service customers.

Management held full-year 2014 guidance figures steady, expecting 5% annual revenue growth and stable overall margins. Adjusted earnings should grow by 3% to 4%.

"The quarter was marked by several transformative moves to grow our wireless, broadband, and video services," said AT&T CEO Randall Stephenson in a prepared statement. "Our move to simple pricing and no-device-subsidy plans is repositioning the wireless business model, resulting in our best postpaid net adds in nearly five years and our lowest-ever postpaid churn."

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