AT&T Tops Tempered Q2 Earnings Expectations but Misses on Revenue as Warner Bros, Turner Feel COVID Impact

Company sees $830 million coronavirus impact, WarnerMedia revenue drops 22.9% with no NBA games and no box office

Last Updated: July 23, 2020 @ 6:09 AM

AT&T reported its second-quarter 2020 earnings on Thursday, when there was some good news and some (expected) bad news from the COVID quarter.

Wall Street forecast earnings per share (EPS) of 79 cents on $41.18 billion in revenue for AT&T, according to a consensus compiled by Yahoo Finance. The company reported adjusted EPS of 83 cents on $41.0 billion in revenue.

AT&T’s adjusted earnings were down six cents per share from the year-ago quarter. The revenue figure was $4 billion less than Q2 2019.

On Thursday, AT&T said it recognized $320 million of extra corporate costs due to the coronavirus pandemic. Impact on operations was another $510 million.

AT&T’s WarnerMedia was roughed up in the April-June 2020 quarter. There, operating revenue declined 22.9% from the comparable quarter. On a percentage basis, Turner (-12.4%) suffered the biggest loss with no NBA games.

HBO revenue was down 5.2 percent. AT&T revealed that as of June 30, 2020, it had 36.3 million combined HBO Max and HBO subscribers. That tally was up from 34.6 million six months earlier. Streaming service HBO Max launched in Q2.

With basically no box office, Warner Bros. revenue fell 3.9%.

AT&T’s largest segment is its communications businesses, which saw revenues decline 4.7%. There, mobile did fine, but continued cord-cutting (this time, a net loss of 886,000 video subscribers) roughed up the cable connections unit, which saw revenues fall 10.1%. Revenues from the company’s connections for businesses declined 3.5%.

New CEO John Stankey was undeterred.

“Our solid execution and focus in a challenging environment delivered significant progress in the quarter, most notably the successful launch of HBO Max, resilient free cash flow and a strengthened balance sheet,” he said in a prepared statement. “Our resilient cash from operations continues to support investments in growth areas, dividend payments and debt retirement. We are aggressively working opportunities to sharpen our focus, transform our operations and continue investing in growth areas, with the customer at the center of everything we do.”

Most media companies were financially rocked in the second quarter of 2020, which is when the greatest impact (thus far, at least) of the coronavirus shutdown was felt.

AT&T stock (T) closed Wednesday at $30.16 per share. The regular U.S. stock markets will reopen 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.