Total revenue for the period came in at $41.7B, ahead of the Thomson Reuters consensus estimate of $41.19B. Adjusted earnings per share of 78 cents blew past the estimate of 65 cents.
DirecTV Now, the skinny-bundle TV service launched in late 2016, added 368,000 subscribers in the quarter to reach 1.2M overall. That offset a loss of 207,000 traditional video customers, leaving the total video footprint at 25.2 million.
The company is preparing for what could be an epic legal battle against the Department of Justice. The two parties are set to go to trial March 19 in federal court after the DOJ’s antitrust division filed a lawsuit aiming to block AT&T’s $85 billion acquisition of Time Warner.
Many observers have been shocked by the DOJ’s abrupt opposition to the deal, which is a vertical merger of largely distribution assets (AT&T) with content (Time Warner) and was on the verge of final approval. Some have indicated the not-quite-invisible hand of President Donald Trump, who has advocated a pro-business agenda yet has spoken out against the AT&T-Time Warner deal as excessive. Signs pointed to Trump’s longstanding feud with CNN, a key part of the Time Warner portfolio.
The White House has denied any communication with the DOJ, and antitrust division chief Makan Delrahim has explained that he opposes the combination because he believes it would harm both competitors and consumers. AT&T, which controls massive distribution channels, could use the leverage of also controlling HBO, CNN, TNT and a host of others to boost rates, the government contends.
Since exchanging fire with the DOJ after the lawsuit was filed last fall, AT&T has appeared to be making an effort to smooth things over, praising Trump by name for his tax overhaul and handing out employee bonuses.
Shares in AT&T, which gained a fraction today to close at $37.45, are largely flat compared with their level when the Time Warner deal was announced in October 2016.