On the same day AT&T announced its proposed acquisition of media conglomerate Time Warner, the company also reported its third quarter results, three full days ahead of schedule. The result was a bit of a mixed bag for the telecom giant, with the company losing high-ARPU postpaid wireless subscribers and missing revenue estimates, but reporting all-time high U.S. wireless service EBIDTA margins of 50.1%. According to the report, the company's consolidated revenues for the three months from July thru September came in at $40.9 billion, which was an increase of 4.6% over the same period last year thanks to the acquisition of DIRECTV. The company's overall EBIDTA margins grew 20 basis points to 38.5%, while net income increased 7.3% to 3.42 billion. The adjusted EPS (Earnings per share) stood flat at $0.74, while free cash flows during the quarter declined 6.5% to 5.18 billion.
The company also said that it added 700,000 branded smartphones to the U.S. subscriber base and gained 323,000 new subscribers to its newly-acquired DTH platform, DIRECTV. The company also reportedly brought in 171,000 new broadband subscribers to its fold during the quarter. However, even as the company says it is on track to meet or even exceed revenue expectation for the whole year, the company's earnings call has thrown up some rather disconcerting figures that will, no doubt, be examined very carefully by the top management as well as the company's investors. The biggest reason for those concerns seem to be the 268,000 net postpaid wireless phone subscriber losses, even as its smaller rivals, T-Mobile and Sprint reported adding a total of over 1.4 million postpaid subscribers during the same period. T-Mobile managed to add 753,000, while Sprint accounted for the rest.
Much like AT&T, though, Verizon also came up short, losing 36,000 postpaid subscribers during the period. AT&T, however, tried to play down the situation by attributing a large number of those losses to "disconnects from the company's 2G network". AT&T also reported a small, but steady decline in its overall wireless ARPU, which reached $37.65 during the quarter, while its postpaid ARPU came down to $54.67 during Q3, 2016. Thankfully, though, the company was able to decrease its postpaid churn to 1.05%, which is an 11 basis point decline from the 1.16 the company had reported during the same period last year.