AT&T Inc. (T) - Get Report posted stronger-than-expected second quarter earnings Thursday but booked a notable slump in WarnerMedia revenues as coronavirus shutdowns hit the global entertainment industry.
AT&T said adjusted earnings for the three months ending in June was pegged at 83 cents per share, down 6.75% from the same period last year and 4 cents ahead of the Street consensus forecast. Group revenues, AT&T said, fell 8.9% from last year to $41.billion, just shy of analysts' estimates of $41.1 billion.
AT&T said it had around 36.3 million customers logged for its newly-launched HBO Max service (including legacy HBO subscribers) after adding around 3 million over the second quarter. That figure, however, is down from 34.6 million at the end of last year. Postpaid mobile phone subscribers, however, fell by 151,000 against market forecasts of additions totaling around 7,000.
“Our solid execution and focus in a challenging environment delivered significant progress in the quarter, most notably the successful launch of HBO Max, resilient free cash flow and a strengthened balance sheet,” said new CEO John Stankey. “Our resilient cash from operations continues to support investments in growth areas, dividend payments and debt retirement."
"We are aggressively working opportunities to sharpen our focus, transform our operations and continue investing in growth areas, with the customer at the center of everything we do,” he added.
AT&T shares were marked 0.8% lower in early trading immediately following the earnings release to change hands at $29.92 each, a move that would still leave the stock with a year-to-date decline of around 22%.
Revenues from WarnerMedia, its entertainment division, fell 22.7% to $6.8 billion as the coronavirus pandemic delayed film production and closed movie theaters at home and around the world. WarnerMedia earnings fell 13.3% to $2.08 billion.
Stankey served as COO of WarnerMedia before being named to replace outgoing CEO Randall Stephenson in April of this year, who left the group after thirteen years at the helm.
During his tenure, he guided the company through major acquisitions such as the $49 billion purchase of DirecTV in 2014 and the $108.7 billion takeover of WarnerMedia two years later.