AT&T just wrapped up its third quarter, the first as a combined company with DirecTV, and the satellite provider is already having a significant impact.
AT&T did miss revenue estimates but said that may have been due to analysts including the full month of July operations from DirecTV. AT&T’s consolidated results include DirecTV operations from July 25.
Regardless of coming up short on estimates, AT&T’s consolidated revenue for the third quarter still shot up nearly 19 percent, due in large part to the DirecTV acquisition.
Along with the rise in revenue, operating income rose to $5.9 billion from $5.6 billion in the year-ago quarter. But operating income margin was 15.2 percent, down from 17 percent in the year-ago quarter.
U-verse subscribers declined as AT&T decreases promotions and works on shifting those subscribers toward the lower-cost DirecTV platform.
As a result, since the completion of the acquisition, DirecTV has added 26,000 video subscribers.
Even as U-verse video subscribers dwindled, AT&T was able to add 192,000 IP broadband subscribers, including business customers.
While competitors like Comcast now have broadband subscribers in numbers that eclipse their own video subscriber totals, AT&T has just seen a large swing in the opposite direction now that DirecTV’s customers have been brought into the fold.
AT&T-DirecTV now has more than 25 million video subscribers in the United States.
AT&T CFO John Stephens said video pressure began to dissipate following the acquisition closure and that the company expects video subscriber growth to continue.
Following the positive quarterly results, which gave AT&T’s stock a boost in after-hours trading, the company adjusted in full-year 2015 guidance.
For the full year, AT&T now expects adjusted earnings per share in the $2.68 to $2.74 range and free cash flow in the $15 billion range or better.
