AT&T the second biggest wireless carrier in the U.S. missed estimates on profit and cut its forecast for sales as price cuts and promotions took their toll.
Earnings for the third quarter, excluding special items, were 63 cents per share, which was below the Wall Street estimate of 64 cents per share.
The wireless giant reduced its revenue growth for the full year to between 3% and 4% in part due to fewer than had been expected sign-ups for installment plans.
The revenue growth had previously been projected by the company to be 5% for the year.
To offset the slower growth as well as an increased amount of wireless competition, AT&T has pushed into new sectors such has mobile Internet service for autos and home security.
AT&T is also waiting on approval from regulators for its purchase of DirecTV a provider of satellite TV for $48.5 billion. The company is looking to possibly expand into Latin America.
The pressures AT&T is facing to match price cuts by rivals continues, as new lower plans are in the pipeline. Sprint Corp, for example has aggressively started to cut its prices of late and announced a new plan for family this week for just $20 per month that includes 1 gigabyte of data, which is over triple the data someone with AT&T can get for $20.
AT&T CFO John Stephens did not agree with the theory that AT&T has slashed its prices to win customers, saying instead the company added value to its monthly plans and installment plans for its smartphones, as another alternative for mobile handset users.
On Thursday, shares at AT&T were down 2.4%, their biggest drop for one session since April.
Over 785,000 new monthly subscribers were added by AT&T, which was short of estimates on Wall Street of 789,000. The gains in new customers compared to Verizon’s gains of 1.52 million.
AT&T signed over 434,000 subscriptions for tablets and 466,000 lines for smartphones in comparison to 1.1 million new tablets subscribers and 457,000 new smartphone users for Verizon.
This story was originally published by WKRB News (https://www.wkrb13.com) and is the sole property of WKRB News. If you are reading this article on another website, that means this article was illegally copied and re-published to this website in violation of U.S. and International copyright law. You can view the original version of this story at https://www.wkrb13.com/business/401289/att-comes-short-wall-street-estimates.html