AT&T shares rebound on Wednesday, quarterly earnings meet expectations but company loses premium TV subscribers

AT&T Incs second-quarter earnings, reported on Wednesday, came in line with Wall Street estimates, while revenue topped expectations.

On the other hand, the US wireless carrier lost more premium TV subscribers during the past quarter compared with the prior three-month period, since consumers sought cheaper streaming services such as Netflix Inc.

AT&T shares closed higher for the fourth time in the past thirteen trading sessions in New York on Wednesday. It has also been the sharpest daily surge since February 1st 2018. The stock went up 3.58% ($1.15) to $33.24, after touching an intraday high at $33.38, or a price level not seen since July 17th ($33.58).

Shares of AT&T Inc have risen 16.47% so far in 2019 compared with a 20.45% gain for the benchmark index, S&P 500 (SPX).

In 2018, AT&T Inc’s stock went down 26.59%, thus, it again underperformed the S&P 500, which registered a 6.24% loss.

Total operating revenue went up 15.3% year-on-year to $44.96 billion during the second quarter, while exceeding the median analyst estimate of $44.85 billion.

Revenue from AT&Ts WarnerMedia, which encompasses premium TV channel HBO and Turner, was reported at $8.4 billion during the period, or above the market consensus estimate of $8.3 billion. HBO Max, WarnerMedia’s new streaming service, is due to be launched in the spring of 2020.

At the same time, the company lost 778 000 premium TV subscribers, or clients using DirecTV satellite and U-verse television, during the second quarter. That compares with another 544 000 subscribers lost in Q1.

The telecoms giant reported a net phone subscriber growth of 72 000 during the quarter, as it reduced the prices of its offers. In comparison, analysts on average had expected an increase by 27 000 subscribers.

Meanwhile, net income attributable to shareholders shrank to $3.71 billion ($0.51 per share) during the second quarter from $5.13 billion ($0.81 per share) in the year-ago period.

Earnings per share, which exclude special items, were reported at $0.89 during the latest quarter, thus, matching a consensus of estimates.

Analyst stock price forecast and recommendation

According to CNN Money, the 23 analysts, offering 12-month forecasts regarding AT&T Inc’s stock price, have a median target of $34.00, with a high estimate of $43.00 and a low estimate of $21.00. The median estimate represents a 2.29% upside compared to the closing price of $33.24 on July 24th.

The same media also reported that at least 12 out of 28 surveyed investment analysts had rated AT&T Inc’s stock as “Hold”, while 11 – as “Buy”. On the other hand, 2 analysts had recommended selling the stock.

TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

Related News