AT&T's Second-Quarter Earnings Match Analysts' Forecasts

AT&T reports second-quarter earnings in line with analysts' forecasts as it continues to focus on both paying down debt and building out its next-generation 5G wireless network.
By M. Corey Goldman ,

Wireless giant AT&T (T) - Get Report on Wednesday reported second-quarter earnings in line with analysts' forecasts as it continues to focus on both paying down debt and building out its next-generation 5G wireless network for commercial use.

The Dallas-based company posted second-quarter net income of $3.7 billion, or 51 cents a share, vs. $5.1 billion, or 81 cents a share, in the year-ago quarter. On an adjusted basis, however, the company posted per-share earnings of 89 cents, in line with analysts' forecasts but below the adjusted 91 cents a share it earned a year ago.

Revenue for the second quarter totaled $45 billion vs. $39 billion in the year-earlier quarter, just before it finalized its deal with Time Warner. Analysts polled by FactSet had been expecting revenue of $44.9 billion in the June quarter.

"We continue to pay down debt and are more confident than ever that we'll meet our year-end deleveraging goal, and we'll take a look at buying back stock," CEO Randall Stephenson said in a statement, noting that the company's rollout of its 5G coverage - FirstNet - is running ahead of schedule.

It is expected to be commercially available in the first half of 2020.

While the company reported higher second-quarter operating income for its WarnerMedia entertainment unit amid growth at Turner, Warner Bros. and HBO, it lost 168,000 subscribers at its DirecTV Now streaming service in the period due to "higher prices and less promotional activity."

The service had lost 83,000 subscribers in the first quarter after a 267,000 drop in the fourth quarter of 2018. As of the end of June, the service had 1.3 million subscribers.

AT&T's WarnerMedia unit (formerly Time Warner) earlier this month announced that it was launching a service known as HBO Max in spring 2020 to compete with HBO's Now streaming service.

Shares of AT&T were up 2.74% to $32.97 in trading Wednesday.

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