AT&T Tops Q3 Earnings Forecasts as WarnerMedia Recovers From Pandemic

·2 min read

AT&T beat media analysts’ financial forecasts for the third quarter of 2021, despite challenges presented from HBO Max being removed from Amazon Prime channels.

Wall Street had estimated earnings per share (EPS) of 78 cents on $39.14 billion in revenue, according to a consensus estimate compiled by Yahoo Finance. AT&T reported adjusted EPS of 87 cents on $39.9 billion in revenue.

WarnerMedia’s revenue rose 14.2% to $8.4 billion, benefitting from five Warner Bros. theatrical releases in Q3 2020 versus just one (“Tenet”) in Q3 2020. Ad sales at the segment were down from the comparable quarter last year, which had the delayed NBA season on TNT throughout the summer months. There was also much more political ad spending leading up to the 2020 U.S. presidential election.

HBO and HBO Max combined for 45.2 million domestic subs and 69.4 million global subs at the end of Q3. Stateside, that’s down from the previous quarter, which wrapped with 47 million domestic subs. Globally, it represents an increase from 67.5 million. Read more about that here.

Of course, AT&T’s biggest segment is still its communications business. Under that banner, mobile and consumer wireline sales increases more than offset business-to-business declines.

All told, however, overall company revenues decreased year to year due to AT&T spinning off DirecTV this summer. That was factored in to estimates.

“We continue to execute well in growing customer relationships, and we’re on track to meet our guidance for the year,” John Stankey, AT&T CEO, said in a statement accompanying the quarterly results. “We had our best postpaid phone net add quarter in more than 10 years, our fiber broadband net adds increased sequentially, and HBO Max global subscribers neared 70 million. We also have clear line of sight on reaching the halfway mark by the end of the year of our $6 billion cost-savings goal.”

Company stock (T) closed Wednesday afternoon at $25.90. The U.S. stock markets reopen at 9:30 a.m.

AT&T executives will host a conference call at 8:30 a.m. ET to discuss the third quarter in greater detail. WarnerMedia is merging with Discovery, Inc. At the moment, that is expected to close in the first half of 2022.

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