AT&T (T) - Get AT&T Inc. Report shares traded sharply lower at the opening bell Wednesday after the group posted weaker-than-expected second quarter revenues and noted that "cord cutting" customers continued to dump its satellite television offerings in favor of online streaming rivals such as Netflix Inc. (NFLX) - Get Netflix, Inc. (NFLX) Report and Amazon Inc. (AMZN) - Get, Inc. Report .

AT&T said adjusted earnings for the three months ending in June, the company's fiscal second quarter, came in at 91 cents a share, topping the consensus forecast of 85 cents as it rose 15% from the same period last year.  Group revenues, the company said, fell 2.1% to $39 billion, narrowly missing the Street estimate of $39.4 billion. AT&T also said it booked 2 cents per share of earnings "health" from the recently-approved $85 billion merger with Time Warner (TWX) .

"Whether it's Netflix, Amazon, Google, Disney or Comcast, everybody is now pursuing the same thing; 'How do you deliver great media and entertainment experiences to our customers?', CEO Randall Stephenson told investors on a conference call late Tuesday. "And I think the recent valuations of media companies is reinforcing this point. But we couldn't be any happier with the range and quality of brands that we now own."

"But just owning great content is no longer sufficient," he added. "The modern media company must develop extensive direct-to-consumer relationships, and we think pure wholesale business models for media companies will be really tough to sustain over time. And when you look across our wireless, pay TV and our broadband businesses, we now have more than 170 million direct-to-consumer relationships."

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AT&T shares fell 3.3% lower from their Tuesday close in New York to change hands at $30.65 each. a move that extends the stock's year-to-date decline past 20% and values the Dallas, Tx.-based group at just under $230 billion.

Stephenson's reference to online streaming competition was evident in the 286,000 satellite TV subscribers that left the group over the three-month period as cord-cutting continues to fragment the media industry. The group added 342,000 subscribers to its DirecTV Now service, bringing total subscribers to the streaming pay-TV package to 1.8 million, but customers pay less per month than the traditional satellite TV subscribers that DirecTV is losing.

Still, the group added 46,000 post-paid mobile subscribers to its wireless offering, more than triple the market forecast, following on from stronger-than-expected additions yesterday from rival Verizon Communications (VZ) - Get Verizon Communications Inc. Report .

By using data from wireless and TV networks, Stephenson said AT&T can sell targeted ads for three to five times the rates of conventional spots. The newly added Turner networks such as CNN, TNT and TBS increase AT&T's ad inventory by three times, he added.