AT&T's transformation into a media company isn't going to be easy.
The telecom provider, which has placed big bets in media with its acquisition of DirecTV and Time Warner, posted a mixed bag in its third-quarter results, with a strong showing from its rebranded WarnerMedia segment but also a loss of traditional television customers.
WarnerMedia saw revenue rise 6.5 percent to $8.2 billion, helped by HBO's rising subscription revenue and the success of DirecTV Now streaming service.. But the company saw a net decline of 346,000 customers in traditional video, despite a gain of 49,000 customers in its
On the core wireless side, AT&T boasted that it added 3.4 million accounts in the US, but that was mostly driven by connected devices like cars and the Apple Watch, and a gain of 481,000 prepaid phone customers. It added 69,000 postpaid phone customers, or people who pay their bills at the end of the month and generally boast higher credit scores.
The wide range of results is part of the new status quo for AT&T, which is undergoing a transformation from a purely telecom company into a media powerhouse. The company is betting heavily on the move to streaming services, having offered two options -- DirecTV Now and AT&T Watch -- on top of the various streaming services tied directly to core properties like HBO. AT&T CEO Randall Stephenson said he plans to.
AT&T is eager to talk about its media properties as competition in its core wireless business continues to be fierce. The company has been among the big losers as T-Mobile and Sprint have mounted their comebacks, picking customers away from the bigger players.
In Mexico, AT&T added 907,000 wireless subscribers to bring its base up to 17.3 million, with revenue rising 2.6 percent over a year ago.
Its media and advertising business, which last month was rebranded Xandr (a reference to Alexander Graham Bell), saw revenue rise 33.6 percent over a year ago.
The company posted a third-quarter profit of $4.72 billion, or 65 cents a share, compared with a year-earlier gain of $3.12 billion, or 49 cents a share, when Time Warner wasn't a part of the company yet.
Excluding one-time charges, the company earned 90 cents a share, while revenue rose 15.3 percent to $45.74 billion.
Analysts expected AT&T to earn 94 cents a share on revenue of $45.65 billion, according to Yahoo Finance.
AT&T shares fell 2.3 percent to $32.27 in premarket trading.
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