AT&T beats revenue estimates as reopening helps phone sales
AT&T Inc (T.N) outperformed Wall Street revenue expectations as the reopening of the US economy after pandemic-related sanctions strengthened handset revenues and the media sector.
In early trading, AT&T shares rose 5.3 percent to $31.70.
On Thursday, the company announced that it gained 595,000 net cell phone customers in the first quarter, more than double what analysts predicted.
AT&T’s divisive decision to allow its whole 2021 theatrical movie lineup open to online viewers at the same time helped the firm gain 2.7 million additional HBO and HBO Max users.
The cinematic release of “Godzilla vs. Kong,” which was also available to HBO Max customers, earned more than $80 million in the United States and more than $300 million worldwide as the No. 1 film over the previous three weekends, representing an early support of WarnerMedia CEO Jason Kilar’s approach.
In an interview, Kilar said that the company’s 2022 movie slate, especially major blockbuster films, would return to theatres, but a portion will be available on HBO Max on the same day.
“I don’t believe we’d go back to… 2016, where the windows were very long and lengthy,” he stated.
Netflix shares fell 11% on Monday after the company announced a dramatic slowdown in new customer acquisitions globally. Netflix launched 450,000 additional paying customers in the United States and Canada.
HBO and HBO Max currently have a worldwide viewer base of 63.9 million, equivalent to over 100 million for Walt Disney Co’s Disney+ and 207.6 million for Netflix.
In June, a lower-cost edition of HBO Max with ad support will be published.
To attract subscribers to prevent them from moving to rivals, AT&T has been actively investing in the upcoming 5G broadband network and bundling its subscription service HBO Max for free for some phone plans.
Wireless call turnover, or the pace of consumer defections, fell 0.1 percent to 0.76 percent in the first quarter. The addition of HBO Max to higher-priced phone plans contributed to the changes.
According to Refinitiv IBES reports, AT&T’s revenue increased nearly 3% to $43.9 billion, above analysts’ average forecast of $42.69 billion.
Except items, AT&T received 86 cents per share, which was higher than the 78 cents predicted by analysts.
WarnerMedia, which comprises HBO, continued to rebound from the pandemic’s devastation, which caused sporting competitions and movie productions to be halted. WarnerMedia’s revenue increased 9.8 percent to $8.5 billion.
As Americans started to operate from home after the pandemic, AT&T attracted 235,000 additional broadband internet subscribers, pushing up demand for home Wi-Fi.
The company’s total debt increased to $169 billion at the end of the first year, owing to the acquisition of additional cellular bandwidth, or data-carrying airwaves.
Separately, competitor Verizon Communications Inc (VZ.N) said it shed more cellular subscribers than anticipated in the first quarter when it competed for business with T-Mobile US Inc (TMUS.O) and AT&T.