AT&T shares fell by more than 4% in early trading Wednesday, after the telecom giant reported mixed Q1 earnings, as subscriber losses continued to plague its media business.
AT&T shares fell as low as $30.71 per share in early trading April 24, down 4.3% or $1.39 each. The stock closed at $30.79 each on Wednesday, down 4.1%.
The telco reported mixed Q1 results on Wednesday morning --overall revenue was up nearly 18% to $44.8 billion, but subscriber losses at its Entertainment Group continued to rise -- it lost 544,000 premium TV customers and shed 83,000 subscribers at its DirecTV Now streaming video unit. The company did offer some insight into its upcoming streaming service, slated for a Q4 release, and said it would hold a WarnerMedia Analysts Day in September or October.
In a research note MoffettNathanson principal and senior analyst Craig Moffett said the premium TV loss -- a combination of DirecTV and Uverse subscribers -- were far worse than consensus expectations of a loss of about 385,000 customers. The DirecTVNow decline was inline with consensus estimates of a loss of 82,000 subscribers.
The DirecTV Now losses build on a decline of 267,000 subscribers at the over-the-top service in Q4. That service, once one of the fastest growing in the streaming space -- it now has about 1.5 million customers, down from around 1.8 million in Q3 -- has lost 17% of its customers in a six-month period.
“For a while, AT&T pointed to their DirecTV Now OTT service as the way out of the DirecTV tar pit,” Moffett wrote. “In the months since a price increase in July, however, the growth of their DirecTV Now subscribers first slowed, and then collapsed.”