October 24, 2017 / 8:40 PM / a year ago

CORRECTED-UPDATE 1-AT&T results miss estimates as video competition rises

(Corrects lost subscribers to 89,000 from 85,000 in paragraph four)

NEW YORK, Oct 24 (Reuters) - AT&T Inc’s quarterly results missed Wall Street estimates as the U.S. No. 2 wireless carrier lost video subscribers to traditional and online TV competitors and fewer of its existing customers upgraded their devices ahead Apple Inc’s launch of the iPhone X.

AT&T is battling industry leader Verizon Communications Inc and smaller rivals Sprint Corp and T-Mobile US Inc for customers in a market where most people already have cell phones.

The company, which is in the process of buying Time Warner Inc for $85.4 billion in an effort to turn itself into a media powerhouse, has sought to compete by bundling mobile service with video entertainment. It has said it expects the deal to close by the end of the year.

AT&T, which owns satellite television service DirecTV, said it lost 89,000 U.S. video subscribers in the quarter, slightly fewer than the 90,000 it said earlier this month in a regulatory filing, due to intense competition in the traditional pay-TV market and the impact of recent hurricanes.

In the same filing, AT&T also reported 900,000 fewer handset equipment upgrades than in the year-ago period, which negatively impacted wireless equipment revenue.

Analysts have said many consumers are putting off upgrades until the fourth quarter when Apple’s iPhone X is expected to launch.

AT&T reported net income of $3.0 billion, or 49 cents a share, for the quarter ended Sept. 30, down from $3.3 billion, or 54 cents a share, in the year-earlier period.

Excluding some items, it reported earnings of 74 cents. On that basis, analysts on average were expecting earnings of 75 cents per share, according to Thomson Reuters I/B/E/S.

Its shares dipped 1.75 percent to $34.25 in after-hours trading.

Revenue was $39.7 billion, down from $40.9 billion in the year-earlier period. Analysts had expected $40.1 billion, on average. (Reporting by Anjali Athavaley; Editing by Bill Rigby)

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