Shares of AT&T Inc.
were up more than 3% in premarket trade on Wednesday after the company reported second-quarter earnings after the bell on Tuesday that beat Wall Street expectations. The internet, phone and TV provider also reported wireless phone results that surprised analysts. AT&T added 127,000 new wireless postpaid subscribers, far above FactSet’s consensus for 20,500 adds, and the company reported record low churn, thanks in part to DirecTV. “Despite the competitive environment, and solid volumes from T-Mobile, bundling with [DirecTV] drove strong wireless results,” wrote Jefferies analyst Mike McCormack. The company lost 351,000 traditional TV subscribers in the quarter, though that was offset thanks to its internet live TV offering DirecTV Now, which the company said has half a million subscribers. But management admitted that cord-cutting in the TV landscape is still having an impact and in fact has increased. “Comments around cord-cutting and OTT adoption bear monitoring as inflection in trends could indicate accelerating linear subscriber declines,” McCormack wrote. AT&T shares have declined nearly 15% in the year to date, while the S&P 500 index
has gained close to 11%.