Telecom giant AT&T on Wednesday reported its first-quarter financials, the first set of results affected by a few weeks worth of the coronavirus pandemic.
It detailed a $430 million hit to quarterly earnings, but added: “The economic effects of the pandemic and resulting societal changes are currently not predictable.”
“In the first quarter of 2020, we recognized approximately $430 million, or $0.05 per share, of incremental costs associated with bad debt reserves, voluntary corporate actions taken primarily to protect and compensate front-line employees and contractors, and WarnerMedia production shutdown costs,” the company explained. “We expect more than half of these incremental charges will be short-term in nature.”
AT&T disclosed that it lost 138,000 subscribers at its AT&T TV Now streaming service in the period, following a loss of 219,000 in the fourth quarter and a loss of 83,000 in the year-ago period. It also recorded a 897,000 loss of premium TV subscribers at DirecTV and U-Verse, compared with a loss of 945,000 in the fourth quarter and a year-ago loss of 544,000. Overall it lost 1.035 million TV subscribers.
UBS analyst John Hodulik had forecast AT&T TV Now losses of 278,000 subscribers and a premium TV sub drop of 709,000.
Wall Street analysts have been debating whether the virus crisis that has forced people to stay at home would make pay TV services more core for consumers looking for news and entertainment or accelerate cord cutting amid rising unemployment.
AT&T, led by chairman and CEO Randall Stephenson, said WarnerMedia’s revenue and earnings fell. Hodulik had forecast a 4.5 percent revenue drop to $8.0 billion and a 17.2 percent earnings decline to $1.98 billion.
WarnerMedia operating earnings in the first quarter also again fell amid investment and foregone revenue tied to streaming service HBO Max, just like in the fourth quarter when foregone revenue had amounted to $1.2 billion. The company had previously said that WarnerMedia’s “strategic decision” to keep such shows as Big Bang Theory for HBO Max instead of licensing them to other services would “pay off over the long term.”
Warner Bros.’ first-quarter earnings and revenue fell. Its releases in the period included Birds of Prey and The Way Back. The year-ago quarter had included The Lego Movie 2, Isn’t It Romantic and carryover from Aquaman.
HBO also posted lower revenue and earnings.
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Written By: Tommy Lightfoot Garrett
Photographs are Courtesy: WarnerMedia
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