AT&T missed its analysts' earnings expectations by a penny, at 63 cents per share, adjusted. It also reported $32.96 billion in revenue for the quarter, missing Street estimates of $33.25 billion.
"[T]he fact that they're still missing even with that tailwind tells us that the underlying fundamentals of the business are very, very troubled right now," said Craig Moffett, senior research analyst at Moffett Nathanson.
"It's not a growth business anymore. What you're looking at is a mature business with four competitors with high fixed and low variable costs, and it's very difficult to sustain pricing in a market like that," Moffett said. He currently has a "hold" rating on the stock.
The telecom giant said total revenue rose 2.5 percent from the year-ago quarter, boosted by a 5 percent year-over-year increase in wireless revenue.
However, the company's wireless operating profit margin decreased to 24.6 percent, versus 26.4 percent in the year-earlier quarter, as more customers migrate to its lower priced "mobile share value plans."