AT&T earnings showed a 5-cent per-share profit hit from the coronavirus emergency as well as revenue that missed first-quarter analyst estimates amid weakness at WarnerMedia. AT&T stock fell on Wednesday as wireless postpaid phone subscriber growth came in above views while pay-TV losses continued.
The telecom and entertainment giant also withdrew 2020 guidance. AT&T (T) stock fell 1.3% to close at 29.47, though it traded up earlier on the stock market today.
"We have a strong cash position, a strong balance sheet, and our core businesses are solid and continue to generate good free cash flow — even in today's environment," Chief Executive Randall Stephenson said in a press release. "In light of the pandemic's economic impact, we've already adjusted our capital allocation plans and suspended all share retirements. As a result, we're able to continue investing in critical growth areas like 5G, broadband and HBO Max."
AT&T earnings fell 2% to 84 cents an adjusted share including the impact of the coronavirus emergency, the company said. Excluding the coronavirus business impact, earnings would have been 89 cents a share. Revenue fell 4.5% to $42.8 billion.
Analysts expected AT&T earnings of 85 cents a share on revenue of $44.21 billion for the period ended March 31.
AT&T Earnings: WarnerMedia Revenue Takes Hit
A year earlier, AT&T earnings were 86 cents a share on sales of $44.83 billion, including the acquisition of media giant Time Warner.
WarnerMedia revenue fell 12% to $7.4 billion amid an advertising drop at CNN and TBS. The coronavirus forced the cancellation of the NCAA college basketball tournament in March.
AT&T said it will release more movies digitally with theaters shut down. AT&T's report shows that media companies will be hard hit by the coronavirus emergency, New Street Research analyst Jonathan Chaplin said in a note to clients.
"The bottom line: wireless and broadband are resilient, while pay-TV and media have been hit hard," he said. "AT&T's mix of businesses leaves it in relatively stable shape with Covid-19-driven margin benefits in wireless offsetting much of the pressure in WarnerMedia, entertainment and elsewhere."
No Let-up In Video Subscriber Losses
In addition, AT&T added 163,000 postpaid wireless phone customers versus estimates of 99,000.
In addition, the company's entertainment unit continues to struggle. AT&T said it lost 897,000 pay-TV subscribers and 138,000 internet video subscribers.
AT&T acquired satellite TV broadcaster DirecTV for $49 billion in 2015.
Despite its high dividend, AT&T stock has dropped about 23% since Feb. 20 amid coronavirus-driven social distancing and business shutdowns.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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