AT&T missed Wall Street estimates for quarterly revenue on Wednesday, hit by lower-than-expected sales in its WarnerMedia unit and a shortfall in income from a wireless business where it has cut prices to draw in customers.
AT&T has reduced its dependency on the phone business by buying media content through its acquisition of Time Warner, yet faces a daunting struggle to find growth as declines in one business offset growth in another.
- Service revenues up 2.9%; operating income and EBITDA growth with postpaid phone and prepaid net adds
- 179,000 postpaid smartphone net adds in the U.S.
- 80,000 postpaid phone net adds
- 96,000 prepaid net adds of which 85,000 are phones
- 13% operating income growth with solid ARPU gains
- 6.9% EBITDA growth as company targets stability
- 22.4 million premium TV subscribers – 544,000 net loss
- 1.5 million DIRECTV NOW subscribers – 83,000 net loss
- Nearly 300,000 AT&T Fiber gains; 45,000 broadband net adds with broadband revenue growth of more than 8%
- 12.4 million customer locations passed with fiber
- Solid revenue growth with strong operating income growth with gains in all business units
- HBO digital subscriber growth continued as last season of Game of Thrones begins
- Strong Warner Bros. revenue and operating income growth
“Our first-quarter results show that we’re delivering on what we promised,” said Randall Stephenson, AT&T chairman and CEO. “We’re on plan to meet our de-leveraging goals with strong free cash flow and asset sales. We grew Entertainment Group EBITDA in the quarter and are confident we’ll meet or exceed our full-year target. FirstNet deployment continues ahead of schedule. And we are recognized for having the nation’s best wireless network1, as well as the fastest network2.
“All this speaks volumes about our focus on our strategic priorities and our ability to grow our Mobility, WarnerMedia and emerging Xandr businesses. Our teams are executing well and have turned in a good performance to start the year.”