AT&T reports fourth quarter earnings

Good, but not as good. AT&T had a pretty good fourth quarter last year, but for shareholders who still remember the way things were back in the DIRECTV days, things were a little less shiny and happy.

DIRECTV still continues to be the engine driving subscriber growth at AT&T, far surpassing wireless and other avenues. Satellite TV added 235,000 subscribers in a traditionally strong quarter. Add to that 200,000 subscribers who came for DIRECTV NOW, the just-launched streaming service, and you see that the DIRECTV side is super strong.

Unfortunately, the old U-Verse side continues to shed subscribers as fast as the satellite TV side can take them on. 262,000 people left U-Verse last quarter, and clearly not all of them transferred over to AT&T. Latest estimates place U-Verse at slightly less than 3 million subscribers, and that suggests three more years of depressing numbers before the service is permanently shut down.

Without a doubt, this is a transitional time for AT&T as they seek to improve their video experience and merge its wireless and home entertainment businesses. It’s going to take some time but smart analysts will no doubt tell you that considering the massive amount of work to be done, it’s pretty amazing that the company is profitable at all during this complex time. Personally I think they’re doing pretty well.

The first quarter is traditionally a weaker time for both phone and television markets, and it’s hard to know where the new DIRECTV NOW service will go. There have been some reports of unhappy people out there and the promotional price offer has worn off so it’s possible that there won’t be the same level of growth in DIRECTV NOW that we saw in the fourth quarter. Unfortunately, that’s not likely to be offset by subscriber growth in the more traditional segments. Luckily AT&T is a large company and if things are a little flat for one quarter they’ll be fine.

If you’re interested in the full details, including more financial data than you could possibly imagine, check out their press release here.