AT&T reports Q2 revenues of $40.52B, up 23% YoY, profit of $3.41B, up from $3.08B a year ago; adds 2.1M wireless customers but loses 49K video customers in US
Revenue for the telecom giant still falls short of Wall Street expectations — AT&T Inc. logged 23% sales growth …
Context & Ripple Effects
This quarter extends a pattern from earlier in the year: AT&T posted a Q4 revenue miss with wireless revenue down 4.9%, then met expectations in April even as it was losing U-Verse customers faster than adding DirecTV subs. The 23% YoY revenue jump here is headline-grabbing, but it still falls short of Wall Street expectations — growth that big missing consensus says more about what the Street is modeling than about the top line itself.
The mix underneath tells the real story: 2.1M US wireless additions against another 49K video losses, continuing the erosion already visible in Q1. Two years later the same tension shows up in the corpus, when AT&T reports shrinking total revenue alongside early DirecTV Now streaming gains.
First-order effects
- AT&T misses Wall Street's revenue expectations for this quarter despite 23% YoY growth, repeating the dynamic from its January report where double-digit growth still wasn't enough.
- The 49K US video customer loss lands on top of the U-Verse attrition reported in April, meaning the traditional pay-TV base keeps shrinking even after the DirecTV deal.
Second-order effects
- With satellite video cannibalizing its own legacy TV base, AT&T is pushed toward cheaper streaming products — the path that later produces 312K quarterly DirecTV Now additions in the 2018 coverage.
- Wireless becomes the load-bearing business: subscriber adds are strong, but the January report showed wireless revenue falling 4.9%, so volume growth without matching revenue growth pressures pricing across carriers competing for the same switchers.
Third-order effects
- If the pattern holds — acquisition-inflated revenue, eroding pay-TV, decelerating wireless revenue per user — AT&T's structure converges on a wireless-plus-streaming bundle, with TV repositioned from a profit center to a retention tool inside the mobile plan.
- The recurring gap between headline growth and Street expectations points toward investor scrutiny shifting from subscriber counts to revenue quality, the lens under which the later 2018 reports show stock drops of 6%+ despite net adds.
The trend: US telecoms are buying growth through pay-TV consolidation while their legacy video bases shrink, forcing a pivot from satellite subscriptions to wireless-anchored streaming bundles.