AT&T beat analysts' expectations for both earnings and revenue for the first quarter of 2021, which saw the March 31 theatrical and HBO Max release of "Godzilla vs. Kong" and the return of the NCAA March Madness tournament, the telco company revealed Thursday.
Additionally, AT&T says its WarnerMedia's direct-to-consumer subscription revenue rose 35% year over year, growth attributable to the fact that the company didn't launch HBO Max until May 2020, and reported that 2.7 million domestic HBO and HBO Max subscribers had been added in Q1. That brings the total combined subscription tally for HBO and HBO Max to 44.2 million U.S. subs and nearly 64 million globally.
In the breakdown of subscribers, 30.9 million are "wholesale" customers who subscribe to HBO and get HBO Max for free as a result, while 9.7 million "retail" customers subscribe directly to the $14.99/month HBO Max itself. AT&T did not break out the number of "activations" of HBO Max accounts by those who already have HBO, as the company has done in previous earnings reports.
For the quarter ended March 31, AT&T lost 620,000 premium TV video subscribers.
For WarnerMedia, which includes Warner Bros., HBO, HBO Max, TBS, TNT, TruTV and CNN among its individual brands, revenues for Q1 of 2021 were $8.5 billion, up 9.8% from the year-ago period, a jump AT&T attributes to higher subscription, advertising and content sales, reflecting a "partial recovery" from the impact of the pandemic on last year's results.
Subscription revenues were $3.8 billion, up 12.6%. Ad sales were $1.8 billion, up 18.5%, a result of the return of March Madness games. Content revenues totaled $3.4 billion (+3.5%), partially due to WarnerMedia's decision to release its 2021 slate of films both theatrically and on HBO Max on the same day.
AT&T did not disclose WarnerMedia's specific revenue from box office for the quarter in its financial results.
Wall Street had forecast earnings per share (EPS) of 78 cents on $42.69 billion in revenue for AT&T, according to a consensus estimate compiled by Yahoo Finance. The company actually reported EPS of 84 cents on $43.9 billion in revenue, with that revenue result up 2.7% from Q1 2020.
AT&T's net income for the quarter was $7.5 billion versus $4.6 billion in that same quarter last year.
"We continued to excel in growing customer relationships in our market focus areas of mobility, fiber and HBO Max," AT&T CEO said John Stankey said in a statement prepared to accompany the financials. "We had another strong quarter of postpaid phone net adds, higher gross adds, lower churn and good growth in Mobility EBITDA. We also continue to increase penetration in markets where we offer fiber broadband and we're moving quickly to deploy more fiber. HBO Max continued to deliver strong subscriber and revenue growth in advance of our international and AVOD launches planned for June."
AT&T executives will host a conference call at 8:30 a.m. ET to discuss the quarter in greater detail.
Company stock closed Wednesday at $30.11 per share.