AT&T earned $3 billion in its recent quarter, missing profit estimates, and cut its sales forecast as promotions and price cuts took a toll.
Third-quarter earnings, excluding some items, were 63 cents a share, below the 64-cent average of analysts. Its quarterly revenue of $32.96 billion also fell short of the $33.25 billion that analysts expected.
The company on Wednesday also reduced its 2014 revenue growth forecast to a range of 3 to 4 percent, partly because of fewer-than-expected installment plan sign-ups. That was down from a previous projection of 5 percent.
To help offset slower growth and increased competition in wireless, AT&T is pushing into new areas such as home security and mobile Internet service for cars. It is also awaiting regulatory approval for the $48.5 billion takeover of satellite TV provider DirecTV, approval that could take longer than expected as the Federal Communications Commission tries to resolve disputes over who can see programming contracts.
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AT&T, the No. 2 U.S. wireless carrier, added 785,000 monthly subscribers in the quarter, compared with No. 1 Verizon Communications’ 1.52 million additions.
AT&T signed up about 434,000 tablet subscriptions and 466,000 smartphone lines, compared with Verizon’s 1.1 million new tablet users and 457,000 new phone users.
On Tuesday, Verizon also missed profit estimates as more new subscribers chose phone discounts instead of accepting financing for full-priced devices. AT&T is similarly being hit by fewer-than-expected customers signing up for new phone financing plans.
Verizon reported earnings of $3.69 billion, up from $2.23 billion. That was equal to 89 cents per share, short of analysts’ estimates averaging 92 cents per share. Verizon posted revenue of $31.59 billion, up 4 percent from $30.28 billion a year earlier. Analysts expected higher revenue of $31.71 billion.
Sprint, the No. 3 wireless company, will report earnings Nov. 3.