(Reuters) -AT&T forecast annual profit below market expectations on Wednesday as the U.S. carrier grapples with tough competition from cable operators and lowers the value of some of its old equipment, sending shares down nearly 3% in premarket trading.
Telecom operators have in recent months faced pressure from cable operators such as Charter Communications, which have chipped away at their market share with a competitive network and pricing.
AT&T said it expects adjusted profit to be between $2.15 and $2.25 per share in 2024, falling short of expectations of $2.46, according to LSEG data.
The forecast included a write down to the equipment it had procured from Nokia as it shifts to new cost-cutting technology ORAN, or open radio access network.
AT&T in December chose Ericsson to build a telecom network using ORAN that would cover 70% of its wireless traffic in the United States by late 2026.
Its profit expectations were in contrast to the market-beating forecast from Verizon on Tuesday.
AT&T, however, beat estimates for quarterly wireless subscriber additions, thanks to its strong promotional offerings during the holiday season.
Black Friday discounts and the launch of the iPhone series helped drive up phone upgrades in the quarter, after a lull in purchases by customers worried over an uncertain economy.
It added 526,000 net monthly bill-paying wireless phone subscribers in the fourth quarter, higher than expectations for 495,830 additions, according to Visible Alpha.
AT&T expects full-year free cash flow in the range of $17 billion to $18 billion. Its midpoint was above estimates of $17.25 billion.
(Reporting by Samrhitha Arunasalam and Harshita Mary Varghese in Bengaluru; Editing by Arun Koyyur)
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