Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

AT&T raises forecast for revenue, HBO Max as business recovers from pandemic

EconomyJul 22, 2021 04:00PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: Shoppers walk past an AT&T store at the King of Prussia Mall in King of Prussia, Pennsylvania, U.S. November 22, 2019. REUTERS/Mark Makela/File Photo 2/2

By Sheila Dang and Eva Mathews

(Reuters) -AT&T Inc on Thursday raised its full-year financial forecast as the telecoms company emerged from the pandemic with more wireless and internet customers, and beat analyst estimates for phone subscribers and revenue in the second quarter.

The results come as AT&T (NYSE:T) is unwinding its expensive media investments to focus on its original business of providing phone and internet services.

Ahead of closing a deal to combine its media content with Discovery (NASDAQ:DISCA), AT&T said WarnerMedia continued to attract more customers to streaming service HBO Max and notched higher revenue as live sports and televised events resumed from the pandemic.

The company added 789,000 net new phone subscribers who pay a monthly bill during the quarter ended June 30, blowing past Wall Street estimates of 278,000 new subscribers, according to data from research firm FactSet.

WarnerMedia added 2.8 million U.S. subscribers for its premium channel HBO and streaming platform HBO Max during the quarter, thanks to new movies like Lin-Manuel Miranda's "In the Heights" and "Mortal Kombat," which is based on the popular video game.

The growth of new digital video subscribers is one sign the market for streaming media is still expanding in the United States, said WarnerMedia CEO Jason Kilar in an interview, even as streaming pioneer Netflix (NASDAQ:NFLX) reported losing 430,000 subscribers in the United States and Canada in the second quarter.

"The market is expanding based on consumer spending ... but you have to deliver for customers day in and day out," he said.

Kilar added that HBO Max subscriber growth in Latin America is going to exceed the absolute number of subscriber additions in the U.S. market over the back half of this year and that he “wouldn’t be surprised” if that trend persists into 2022.

The company’s Warner Bros. studio is producing over ten motion pictures that will be available exclusively on HBO Max on “day one” in 2022, Kilar said.

The company said during a conference call with analysts that it would delay launching HBO Max in some European markets until early 2022 in order to focus on its early success in Latin America.

AT&T raised its forecast for global HBO Max subscribers to between 70 million and 73 million by the end of the year. It previously expected 67 million to 70 million subscribers.

Still, AT&T's move to exit the entertainment business reflects the enormous costs and challenges to compete in a crowded streaming video industry.

Globally, HBO and HBO Max now have 67.5 million subscribers, compared with 209 million subscribers for Netflix.

'STRONG EXIT VELOCITY'

The Dallas-based company said its deal to sell a minority stake in DirecTV, its struggling satellite TV brand that continued to shed customers during the quarter, to buyout firm TPG Capital is expected to close within the next few weeks.

AT&T Chief Executive John Stankey said the company's commitment to WarnerMedia and DirecTV have remained the same to set the businesses up for success.

"We want to hit a strong exit velocity for both of these businesses, at which point the combination with the right partner only expands their respective opportunities for success," he said during the conference call.

If the deal to sell a piece of DirecTV closes in a few weeks, total revenue will be lowered by $9 billion for the remainder of the year, the company said.

On Wednesday, the company announced it would sell Vrio Corp, its DirecTV business unit in Latin America, to Argentina-based investment group Grupo Werthein after taking a $4.6 billion impairment charge.

AT&T added 246,000 net new fiber internet subscribers during the quarter, up from 225,000 added in the year-ago quarter, as the company has made it a top business priority to serve more households with high-speed internet through fiber optic cables.

Total revenue at AT&T rose 7.6% to $44 billion, beating analysts' average estimate of $42.67 billion, according to IBES data from Refinitiv.

Excluding impacts from the DirecTV and TPG deal, AT&T now expects 2021 revenue growth in the 2% to 3% range and adjusted earnings per share to rise in the low- to mid-single digits.

The company had previously guided revenue growth in the 1% range and adjusted earnings per share to be stable with the previous year.

Net income attributable to common stock rose to $1.5 billion, or 21 cents per share, in the second quarter, from $1.2 billion, or 17 cents per share, a year earlier.

Excluding items, AT&T earned 89 cents per share, above estimates of 79 cents.

Shares of AT&T were flat in morning trading.

AT&T raises forecast for revenue, HBO Max as business recovers from pandemic
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Rick Williams
Rick Williams Jul 22, 2021 2:38PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I'm not sure why this stock is always so flat. nice dividend but never seems to go up and stay there.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email