UPDATED with additional detail and initial management comment. U.S. telecom and media giant AT&T beat analysts’ expectations in its second quarter with earnings per share of 91 cents, up 15% from last year’s period.
Wall Street analysts predicted earnings of 85 cents a share on revenue of $39.39 billion. Revenue came up short at $39 billion.
AT&T has been deepening its investment in media and again today trumpeted the June close of its long-waylaid acquisition of Time Warner, which it has already rebranded as WarnerMedia. The company, of course, is not yet out of the woods, with government regulators announcing this month that they have filed an appeal of the June 12 verdict permitting the merger.
About 16 days of results from WarnerMedia counted toward the consolidated results of AT&T, the company noted. For the quarter, WarnerMedia revenue reached $7.8 billion, up from $7.3 billion in the same period of 2017.
“It’s very early in the game but we’re off to a good start,” said John Stankey, who leads WarnerMedia, “as we get past the close and look to quicken the pace.” Stankey, who delivered a no-nonsense greeting to HBO’s troops last month but then also promised long-awaited new investment in the premium network. On the earnings call, he described plans to “enhance the HBO experience,” while at the same time “maintaining and strengthening the brand reputation.”
HBO and Warner Bros. led the charge, with the premium network posting a 13% revenue gain due to subscriber revenue increases, to $1.7 billion. Revenue per subscriber hit $1.53, up from $1.36 in the year-ago quarter, Warner Bros. hit $3.3 billion, up 11% and now has 75 TV projects in production, the most ever for the dominant operation.
Turner, which arguably faces more intense challenges than other units given the dramatic shifts in consumer habit and tolerance for advertising, reported more modest gains, with overall revenue inching up 4% to $3.2 billion.
DirectTV Now, the internet-delivered pay-TV bundle being pushed by AT&T, saw significant gains in the quarter, adding 342,000 subscribers to hit 1.8 million in the year and a half since its launch.