AT&T income falls brief forward of HBO Max launch

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(Reuters) – AT&T Inc missed fourth-quarter income estimates on Wednesday as one other decline in subscriptions to satellite tv for pc TV supplier DirecTV overshadowed a rise in month-to-month cellphone prospects.

FILE PHOTO: Buyers stroll previous an AT&T as pre-Thanksgiving and Christmas vacation procuring accelerates on the King of Prussia Mall in King of Prussia, Pennsylvania, U.S. November 22, 2019. REUTERS/Mark Makela

AT&T has spent a mixed $134 billion on DirecTV and Time Warner to rework itself right into a media firm, however is struggling to stem the lack of helpful satellite tv for pc subscribers as audiences change to streaming providers.

Analysts at New Road Analysis mentioned in a be aware that though AT&T’s wi-fi subscriber progress was robust, “the whole lot else” was worse than anticipated.

AT&T shares had been down 3.1% to $37.37 in morning buying and selling on the New York Inventory Alternate.

Income from the leisure phase, which incorporates DirecTV, fell 6.1% from the year-ago quarter to $11.23 billion.

AT&T mentioned it misplaced 945,000 “premium” TV subscribers in the course of the fourth quarter, together with from DirecTV, and a smaller variety of cable TV subscribers. Analysts at Cowen had estimated AT&T would lose a web 1 million premium TV prospects, leaving the corporate with 19.Four million.

To counter the lack of prospects to streaming platforms like Netflix Inc and Amazon.com Inc’s Prime, AT&T plans to launch its personal HBO Max streaming platform in Could.

It mentioned it added a web 229,000 new cell phone prospects within the quarter. Analysts had estimated a further 145,000 cellphone subscribers, in keeping with analysis agency FactSet.

AT&T reaffirmed its 2020 steerage, with plans to take a position $1.5 billion to $2 billion on streaming content material in 2020, and a further $1 billion in 2021 and 2022.

Whole working income within the quarter ended Dec. 31 fell 2.4% to $46.82 billion. Analysts had been anticipating $46.96 billion, in keeping with IBES information from Refinitiv.

The WarnerMedia phase, which incorporates HBO, reported income of $8.92 billion, lacking analysts’ estimates of $9.03 billion.

The corporate mentioned it stopped licensing content material, together with the favored sitcom “Pals,” to different streaming providers like Netflix because the launch of HBO Max nears.

Though the licensing resolution minimize WarnerMedia’s income, Chief Monetary Officer John Stephens mentioned the funding “will make HBO Max even stronger, and repay in the long run.”

Web earnings attributable to AT&T fell to $2.39 billion, or 33 cents per share, from $4.86 billion, or 66 cents per share, a 12 months earlier.

AT&T reported a revenue of 89 cents per share, beating Wall Road estimates of 87 cents per share.

AT&T paid down $7.6 billion in debt in the course of the fourth quarter, leaving $151 billion of web debt.

Reporting by Neha Malara in Bengaluru and Arriana McLymore in New York; Modifying by Arun Koyyur, Kirsten Donovan, Heather Timmons and Dan Grebler

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