AT&T earnings and revenue miss Street estimates

AT&T's second-quarter revenue rose, but slightly less than Wall Street forecasts, as a promotional offer to charge customers for devices separately from service weighed on average revenue per user. AT&T shares fell after the announcement.

The telecom giant said on Wednesday that, excluding items, it earned 62 cents, one penny less than Wall Street expectations according to Thomson Reuters I/B/E/S.

AT&T added 1,026,000 contract subscribers in the quarter, the most in five years, matching Wall Street expectations.

Wireless service revenue decreased 1.4 percent in the second quarter, while equipment revenue grew 44.8 percent.

AT&T earned $3.6 billion, or 68 cents per share, compared with $3.8 billion, or 71 cents per share, in the year-ago quarter. Revenue rose to $32.6 billion from $32.1 billion in the year-ago quarter.

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AT&T, the No.2 U.S. wireless carrier, has been under pressure to expand as larger rival Verizon continues to increase its share of the domestic mobile market.

Last month, AT&T told the FCC that its proposed$48.5merger with DirecTV would create a stronger competitor to cable companies, including in the areas where DirecTV and AT&T now overlap. The company announced on Wednesday that it had completed the merger review process at the state level without conditions.

The company said if the merger is approved, it plans to expand its broadband offerings to 15 million customers primarily in rural areas.

Reuters contributed to this article.