AT&T Inc. (NYSE:$T) Q3 video losses sent pay-TV sector shares down on Thursday, October 12, after Wall Street analysts voiced concerns about the continued threat of consumers ending their cable and satellite television subscriptions.
On Wednesday, AT&T, which owns DirecTV, announced that it lost 90,000 U.S. video subscribers in the quarter due to intense rivalry in conventional pay-TV markets and the impact of Hurricane Harvey, Maria, and Irma. As a result, shares dropped 3.8% to $36.74 midday on Thursday.
“It should be clear that DirecTV, like all of its cable peers, is suffering from the ravages of cord-cutting,” MoffettNathanson analyst Craig Moffett said. “It is reasonable to expect a weak quarter for the whole pay-TV industry.”
Further, AT&T reported that it added roughly 300,000 subscriptions to DirecTV Now. While this means customers have a cheaper option for streaming television over the internet, it also means the company lost 390,000 subscribers to its U-verse and satellite services.
The No. 2 U.S. wireless carrier said in its filing that the drop in traditional video subscribers will negatively impact its entertainment group margins and revenue.
AT&T is forecasted to post earnings on October 24.
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