AT&T Inc. reported its first wireless subscriber loss in five quarters, disappointing investors a day after archrival Verizon Communications Inc. posted stronger results.

- The weak subscriber numbers contributed to an earnings shortfall: Profit amounted to 90 cents a share, excluding some items. Analysts had projected 94 cents.

Key Insights

- The loss of 420,000 tablet customers dragged down subscriber figures. The devices have become less popular, and many consumers don’t see a need to keep paying monthly connection fees for them.

- With the rise of online video services like Netflix and Amazon, AT&T also has seen a troubling erosion of its pay-TV customer base.

- The pressure contributed to AT&T’s decision to transform its business by acquiring Time Warner Inc. and its popular media properties like HBO and CNN. Still, the payoff from that deal remains a ways off.

- AT&T’s closest peer, Verizon, which passed on megadeals in favor of focusing on its core business, posted surprisingly strong earnings and wireless subscriber gains Tuesday. That highlighted the contrasting strategies of the two phone giants.

Market Reaction

- AT&T shares fell as much as 1.9 per cent to US$32.40 in premarket hours following the results.

- Even before Wednesday’s dip, the stock was down 15 per cent this year.