AT&T Slumps Despite Subscriber Growth

Business revenue is quickly eroding

BREAKING NEWS

AT&T is getting hammered by investors after a very mixed earnings call. Let’s explore the damage: 

WHAT HAPPENED

AT&T has been in the wilderness for the past year, and it really shows in these earnings figures. The telecom giant missed expectations by only generating a $0.54 EPS from $32 billion in revenue. In short, earnings fell hard while revenue stayed flat. Why is AT&T stuck in this holding pattern?

EFFICIENCY COMES FOR US ALL

AT&T managed to add a lot of new subscribers—hitting 526,000 postpaid phone net adds for the quarter. That beat The Street’s expectations for 487K new subscribers—but that only translated to 3.9% revenue growth. 

At the same time, business sales dropped over 10% as more and more companies opted out of landline contracts. As the wider business world cuts every cost possible—AT&T’s old reliable revenue base is quickly eroding away. 

WHY IT MATTERS

The Communications business is getting tougher and more crowded every day—and AT&T’s shortfall here is a great illustration of how priorities are shifting in this market. Landline usage was basically a no-brainer in the past, but more and more companies are opting for more efficient uses of their limited operating budget. This result adds to a tough year where expenses and slow growth really weighed on AT&T. The stock fell over 2% in early trading and is now down over 10% on the year.