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AT&T Estimates 300K DirecTV Now Adds for Q3

13 October 2017

The company said third-quarter revenues and earnings would be lower than expected as a result of several natural disasters during the period, including hurricanes and earthquakes.

The quake and the series of hurricanes that hit various parts of the US shaved about $90 million off revenue in the period and dinged pre-tax earnings by about $210 million, or 2 cents a share. "We expect further reductions in the fourth quarter as we continue to assess damage to our network and fully restore service". The carrier still reiterated its full-year 2017 guidance for mid-single digit adjusted earnings growth, adjusted consolidated operating margin expansion, capex of about United States dollars 22 billion, and free cash flow at the low end of the USD 18 billion range.

The figure is higher than Wells Fargo analysts' estimate of 200,000 net adds for the OTT service; however AT&T's estimate of 90,000 total video net losses is higher than the 50,000 net losses forecast by the firm.

AT&T attributed the video losses to increased competition with other traditional pay-TV providers and streaming services, hurricanes and AT&T's stricter credit standards, according to the SEC filing.

In pre-released select video subscriber trends for the third quarter of 2017, AT&T estimates it will add 300,000 DirecTV Now subscribers for the period, beating analysts' expectations.

The company continued to expand its postpaid smartphone base even with almost 900,000 fewer handset equipment upgrades, against the year before. The lower upgrade numbers will adversely affect wireless equipment revenue, but will not affect "gross adds".

AT&T Estimates 300K DirecTV Now Adds for Q3