AT&T Q3 results drop on Covid impact, subscriber numbers start to recover

Brenda Watkins
October 22, 2020

For the quarter, AT&T revenue was $42.3 billion, down slightly from $44.6 billion the same period a year ago.

Revenues for WarnerMedia, however, fell to US$7.5 billion in Q3, compared to $8.4 billion in the year-ago quarter.

In excellent news, the corporate added eight.6 million subscribers, greater than double the four.1 million reported quantity it added within the earlier quarter. AT&T said it now expects to generate free cash flow of at least United States dollars 26 billion this year and pay out just over 50 percent of that in dividends. The figure was down from 94 cents in the same quarter previous year.

The streaming service, which debuted in May, is becoming more of a bright spot for the company after a slow start. That rate would support the almost $15 billion in annual dividend payments expected earlier this year, before the coronavirus pandemic forced the company to withdraw its earlier forecasts.

AT&T Q3 Earnings: HBO Max Hits 38 Million US Subs, Warner Bros Revenue Falls 28%

AT&T chief John Stankey sees a "uneven" restoration forward for the film enterprise, forcing WarnerMedia to juggle quite a few situations for theatrical releases in the course of the upcoming vacation season. "We're well back into that ramp back up", Stankey said, adding "We're far enough along that the confidence level of employees is growing day by day that we can protect the safety of individuals and still get work done". Its cable division, which includes DirecTV, lost 627,000 customers in the quarter. but broadband subscribers were up by 158,000, including more than 100,000 subscribers on one of its Keep Americans Connected plans. The Mexican wireless business gained 441,000 wireless customers, while the Vrio satellite-TV unit added 229,000 accounts across Latin America after two quarterly declines.

Even as the WarnerMedia segment attracts new subscribers, it must also contend with existing HBO subscribers through their pay TV providers who are cutting the cord.

While still an extremely high numbers, it's fewer than half of the 1.358 million total video subscribers the company lost in the same quarter past year. (HBO Max has not yet debuted internationally, so global figures are only for HBO.) That number exceeds AT&T's previously announced year-end target of 36 million combined subscribers for HBO and HBO Max. That remains a major roadblock, Stankey said. Subscribers, can access HBO on those devices through the HBO App. HBO Max plans to launch an ad-supported service next year and likely expand globally. The gains were driven nearly entirely by the National Basketball Association season's resumption and political advertising that have helped stabilize the continued challenges Covid-19 is having across the entertainment and media industry broadly and AT&T in particular.

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