AT&T: This Is a Real Storm Crushing a Stock

ATT (T) done a large understanding about a impact hurricanes and a trembler in Mexico will have on a third entertain financial results. But a charge that’s unequivocally brewing involves a large subscriber waste suffered by DirecTV, hemorrhaging that had zero to do with bad continue or healthy disasters.

In a SEC filing late Wednesday, ATT pronounced it would post a net detriment of 90,000 normal video subscribers for a quarter, equivalent by a further of scarcely 300,000 subscribers to a DirecTV Now streaming service.

That means that DirecTV mislaid 390,000 normal subscribers who compensate some-more than subscribers to a streaming video service, highlighting a cord-cutting threat.

It is causing utterly a storm, with ATT’s batch down some-more than 3.5% to $36.82 a share after progressing descending some-more than 4.3% to $36.54.

Raymond James researcher Frank G. Louthan says a DirecTV Now gains are tied to a company’s bundling strategy, and remarkable decreased selling focused on a U-verse customer. He also remarkable something curious, that besides ATT, Comcast (CMCSA) is also job out weaker subscriber trends, and privately blaming ATT’s marketing.

We do trust ATT is being impacted with Charter rebranding campaigns and that is reflected in a numbers total with charge repairs that can mostly be a competition to revive service, though a trends towards DIRECTV NOW gains are approaching to be a concentration during earnings.

Wells Fargo’s Jennifer M. Fritzsche was speedy that ATT still reiterated a expectations for full year 2017 EPS enlargement in a mid-single digits, practiced combined handling domain expansion, collateral expenditures in a $22 billion range, and giveaway money upsurge during a low finish of a $18 billion range.

While pre-released linear video subscriber waste were aloft than expected, and charge repairs impact in a brief tenure were a net negative, clearly T is not a usually one being impacted by these trends in Q3. We perspective a repetition of a 2017 guide–even in a face of these headwinds–as positive. We also are speedy by a DTV Now subscriber enlargement continues to surpass a expectations and (based on counterpart commentary) seems to be carrying a disruptive impact in a market. We demeanour for additional tone when T reports Q3’17 formula on 10/24. We also demeanour for an refurbish on approaching timing of a TWX merger close. We continue to trust that understanding closes earlier vs. later.

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