AT&T Q4 earnings on target, says 2016 transformational

A day after Verizon disappointed with its financial results, AT&T delivered in line earnings for the fourth quarter.

AT&T reported fourth quarter earnings that were in line with expectations as the company delivered 2.8 million net wireless subscribers.

The company, which delivered its results a day after Verizon sparked concerns about future growth, reported earnings of $2.4 billion, or 39 cents a share, on revenue of $41.8 billion. Adjusted earnings were 66 cents a share, in line with Wall Street estimates. Analysts were projecting fourth quarter sales of $42 billion.

For 2016, AT&T reported earnings of $13 billion, or $2.10 a share, on revenue of $162.8 billion.

Among the key highlights:

• AT&T added 1.1 million smartphone subscribers in the fourth quarter in the U.S.
• Wireless postpaid churn was 1.16 percent.
• DirecTV Now launched with 200,000 paid net additions.

CEO Randall Stephenson noted that AT&T transformed its business with the acquisition of DirecTV in 2016 and said the pending purchase of Time Warner was a "logical next step in our strategy" to combine content and distribution.

As for the outlook, AT&T projected revenue growth in low single digits with adjusted earnings growth in mid-single digit range. The guidance excludes the purchase of Time Warner.