AT&T Q3 Earnings: HBO Max Hits 38 Million Subs, WB Revenue -28%

WarnerMedia revenues slip 10% from the prior year as Turner gets (some) delayed gratification from NBA season

AT&T hit media analysts’ earnings predictions on the nose for the third quarter of 2020, when the Warner Bros. and HBO parent bested revenue forecasts. HBO Max had some positive subscriber news, Turner finally got its NBA continuation and smartphone sales did their part.

Everything else was about what you would expect from a full coronavirus quarter.

Wall Street expected earnings per share (EPS) of 76 cents on $41.61 billion in revenue, according to a consensus estimate compiled by Yahoo Finance. AT&T reported 76 cents of adjusted EPS on $42.3 billion in revenue this morning.

Due to the COVID-induced postponement of theatrical releases, Warner Bros. revenue fell 28%, AT&T said, but HBO Max subscribers are ahead of schedule, posting 38 million domestically. AT&T reported 57 million worldwide subs for HBO Max.

WarnerMedia revenue fell 10% to $7.5 billion in the quarter. It would have been worse if not for the delayed NBA season’s positive impact on Turner’s third quarter.

Despite the optimistic subscriber news, HBO revenues declined 2% from 2019’s third quarter.

AT&T’s largest individual business is still phones, though these days, that means mobile.

Its mobility segment posted $17.1 billion in Q3 revenue, up 1%. Unfortunately, that was not enough to carry the overarching communications group, which saw revenue decline 3% to $34.3 billion as cord-cutting took a chunk out of AT&T’s video subscriber numbers.

In one year, AT&T has lost nearly 4 million video connections. The net loss this quarter was 590,000. Streaming service AT&T Now saw 37,000 subscribers leave the over-the-top platform.

Earlier this month, a week or so after Q3 technically closed, AT&T’s WarnerMedia laid off thousands of employees. Earlier this week, ABC (and now, Netflix) alum Channing Dungey was named Peter Roth’s replacement as chairman of the Warner Bros TV Group.

AT&T stock (T) closed Wednesday afternoon at $26.73 per share. The regular U.S. trading day opens again at 9:30 a.m. ET.

AT&T executives will host a conference call at 8:30 a.m. ET to discuss the quarter in greater detail.

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