AT&T takes pandemic hit, but surpasses revenue expectations
Oct 23 2020
Max, the new premium streaming channel from AT&T's Warner Media, said in its earnings report on Thursday that 8.6 million customers have activated their subscriptions to the service in the third quarter, bringing the total number of HBO and HBO Max subscribers in the U.S. to 38 million - ahead of the company's target of 37 million for the end of 2020 - and 57 million globally.
AT&T shares rose about 5% to $28 early Thursday after news of growth in the wireless unit, the company's largest in terms of revenue and profit.
Turner, which owns cable properties like TBS, TNT, CNN, truTV and manages Turner Sports, was a bright spot for the segment. AT&T now has 17.1 million premium TV subscribers, after losing more than 3 million over the course of the previous year. The company attributed a roughly $2.5 billion revenue loss to Covid-19, as theater closures shrank box-office receipts from Warner Bros. movies and wireless roaming fees dried up.
Adjusted earnings in that unit dropped 36.1 %, falling nearly $900 million to $1.93 billion. 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.
In the mobile market, AT&T grew revenues 1 percent to Dollars 17.9 billion thanks to higher equipment sales, while EBITDA was slightly lower at USD 7.7 billion.
John Stankey, CEO of WarnerMedia parent AT&T, said productions - with about 130 underway since last week - are up and running but "the question is, what does exhibition look like?" "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". I think we learned a few things about what we can do. And that's going to help our products. In Q2, the company revealed that 4.1 million had activated their HBO Max account, but now 8.6 million have activated the service.
AT&T counts "activations" as well as subscribers, as many customers who already pay for HBO have access to HBO Max as part of their package, but haven't yet activated that subscription and started watching.
HBO also showed growth, reaching over 38 million paying subscribers in the United States for the linear channel HBO and SVOD service HBO Max combined. And we continue to grow and scale HBO Max, with total domestic HBO and HBO Max subscribers topping 38 million - well ahead of our expectations for the full year.
Those subscription figures are especially crucial, seeing as premium video elsewhere continues to decline.