AT&T's wireless business, its main moneymaker, lost 348,000 mainstream wireless phone customers, marking a return to the large losses characteristic of the past two years after an easing in the previous period.
DirecTV, though, remained flat at 21 million subscribers and DirecTV Now, the recently launched online service, helped to offset defections from U-verse, though the company did not disclose specifics.
In the critical wireless segment, AT&T lost 191,000 postpaid phone subscribers, compared with analysts projections of a drop of 245,000, as competition in the quarter ratcheted up with service providers fighting for share with new unlimited-data plans.
The telco reported 2.7 million wireless net adds, including 2.1 million in the United States and 633,000 in Mexico.
Looking ahead, AT&T is updating its 2017 guidance. In the competitive consumer wireless market, AT&T has been focused on retaining its most profitable customers and shying away from promotional offers to grab market share.
AT&T's consolidated revenues for the first quarter totaled $39.4 billion versus $40.5 billion in the year-ago quarter, primarily due to record-low equipment sales in wireless.
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AT&T, like its telecommunications rival Verizon Communications Inc., faced heightened competition from unlimited-data plans offered by T-Mobile US Inc. and Sprint Corp.
Overall, the Dallas company reported first-quarter earnings of $3.47 billion, or 56 cents per share, down from $3.8 billion, or 61 cents, the year before.
That revenue number fell below analysts' expectations. The company expects adjusted EPS growth in the mid-single digit range, adjusted operating margin expansion, capital expenditures in the $22 billion range, and free cash flow in the $18 billion range. But most telling was the 798,000 postpaid phone subscribers added to T-Mobile's customer logs during the first three months of the year.
The stock, though, reacted favorably to Tuesday's earnings report, rising 1 percent in after-hours trading to $40.18.
In terms of the outlook for the full year, and considering the impact of the Time Warner acquisition, AT&T updated its guidance.