(Reuters) - AT&T Inc (T.N) said it added more than 200,000 paying subscribers to DirecTV Now in what industry observers called a strong launch of the streaming television service introduced in November.
The wireless carrier also said it would record a pretax loss of about $1 billion in the fourth quarter after lowering the assumed discount rates used to measure pension and post-retirement plan obligations.
The loss will not affect operating results in its various divisions and will be included as an adjustment in its fourth-quarter report scheduled for release on Wednesday, AT&T said.
The company also said that it added 900,000 branded U.S. wireless subscribers in the fourth quarter.
Wells Fargo analyst Jennifer Fritzsche said in a note that both the DirecTV and wireless numbers were a "net positive," and the DirecTV Now additions appeared to be ahead of expectations.
Shares of AT&T were up 1.3 percent at $41.55 in afternoon New York Stock Exchange trading.
AT&T acquired DirecTV for $48.5 billion in 2015, making it the largest U.S. pay-TV operator, to diversify into the media and entertainment business.
The company is counting on the mobile video market for new revenue as wireless companies struggle to increase sales in an oversaturated cellular phone market. AT&T introduced DirecTV Now at prices ranging from $35 a month for more than 60 channels to $70 for more than 120 channels.
Barclays analyst Amir Rozwadowski said in a note that the subscriber figures might indicate customers are dropping their cable packages in favor of DirecTV Now.
While the higher-than-expected subscriber numbers could be a result of initial price promotions, he said, "we do believe cable likely saw churn step up."
If the pressure continues, Rozwadowski said cable providers might see more urgency to enter the wireless business and offer bundles comparable with those like AT&T’s DirecTV Now plus unlimited wireless package.
On Friday, AT&T was not the only company to record pension-related charges. Ford Motor Co (F.N) said it would record a pretax loss of about $3 billion for its pensions in 2016.
A year ago, AT&T said it expected to record a pretax gain of about $2.2 billion related to pensions and post-employment benefit plans after raising its discount rates.
(Reporting by Anjali Athavaley and Aishwarya Venugopal in Bengaluru; Editing by Lisa Von Ahn)