AT&T reported second-quarter financial results that met Wall Street expectations, with earnings per share of 89 cents and revenue of $45 billion.
WarnerMedia revenue increased 5.5% to $8.4 billion in the quarter, with operating income rising to $2 billion from the year-earlier period.
Bright spots for WarnerMedia included the final season of Game of Thrones, which attracted record audiences for HBO, and more strong NBA and NCAA basketball ratings for TNT; and Warner Bros. film hits like Detective Pikachu. Home entertainment proceeds from titles like Aquaman were credited with lifting overall results.
DirecTV Now, the internet-delivered TV bundle launched with great fanfare in 2016, continued to backslide in the quarter, losing 168,000 subscribers. Including satellite and cable systems, total video subscriber losses reached 778,000.
It has been a little more than a year now since the official close of AT&T’s $81 billion acquisition of Time Warner, though a federal legal challenges did not end until February of this year. The company continues to work to pay down its long-term debt load, which began the year at $170 billion but has steadily shrunk due to cost-cutting and merger synergies. In its quarterly earnings release, the company said it has retired $18 billion in debt since the close of the merger.
The company’s pay-TV platforms, including DirecTV, DirecTV Now and U-verse, have been locked in a carriage dispute with CBS for the past several days. A separate impasse with Nexstar has kept more than 100 local TV stations owned by Nexstar dark on AT&T systems since early July.
WarnerMedia, meanwhile, has been aggressively remaking itself to remove longstanding silos between business units and also preparing to launch an ambitious streaming service by spring 2020. Few details have been released about the service other than its name, HBO Max, and its senior executive team.
In CEO Randall Stephenson’s view, everything is going according to plan.
“We’re halfway through the year and on track to deliver on all our 2019 priorities,” he said in the earnings release. “We continue to pay down debt and are more confident than ever that we’ll meet our yearend deleveraging goal, and we’ll take a look at buying back stock.”