AT&T beat Wall Street forecasts for earnings per share in the second quarter, the first full period to reflect the impact of COVID-19 on its operations.
Adjusted earnings of 83 cents slipped from 89 cents in the year-earlier quarter, but beat analysts’ consensus forecast for 79 cents.
Total revenue met analysts’ expectation, falling 9% from a year ago to $41 billion. The company said the revenue figure “reflects COVID pressure of an estimated $2.8 billion.”
The results are for the first full quarter during which operations were affected by COVID-19, which started to hit with full force in March. AT&T overall has been able to defend itself against the economic onslaught with its wireless and broadband businesses, which remain key services during the pandemic. WarnerMedia and pay-TV services like DirecTV and U-verse cable are far more vulnerable.
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Pay-TV losses continued, with about 886,000 customers disconnecting in the quarter, leaving total subscribers at 17.7 million.
WarnerMedia revenue plunged 23% to $6.8 billion, with operating profit declining 18% to reach $1.9 billion. Both Turner and HBO were hit hard by the pandemic.
HBO reported 36.3 million U.S. subscribers to both HBO Max and HBO as of June 30, up from 34.6 million as of December 31, 2019. No breakout was offered for Max, which launched May 27. The earnings press release called the launch “successful” and said it had garnered “strong engagement.”
Despite the agony of having no movie releases possible during the lucrative spring and early summer, Warner Bros revenue dipped only 4% to $3.3 billion. Offsetting the movie pain was an uptick in television revenue, including internal sales of shows to HBO Max. The studio unit’s operating expenses fell 11% due to the production hiatus and lower marketing expenses.
Consistent with the previous quarter, management declined to offer much guidance for upcoming quarters, citing the uncertainty of COVID-19.
Shares in AT&T have traded in a narrow range around $30 in recent weeks, well off their 52-week high of $39.70. They gained fractionally in pre-market trading Thursday.
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