AT&T Falls Shy on Earnings in First Quarter Since Time Warner Acquisition

AT&T fell shy of Wall Street’s earnings expectations in Q3 2018 — the company’s first full quarter with Time Warner’s assets under its sizable umbrella.

On Wednesday, AT&T reported 90 cents of earnings per share on $45.7 billion in revenue. Media analysts had forecast 94 cents of earnings on $45.65 billion in revenue, according to a Yahoo Finance poll.

With Time Warner on its financial statements, AT&T grew year over year revenue by 15.3 percent and operating income by 25.2 percent. Of course, expenses also increased.

Also Read: AT&T CEO Randall Stephenson: Netflix Is 'Walmart' of SVOD, HBO Is 'Tiffany'

AT&T’s wireless business is still its biggest segment, and that one saw 4.3 million total net adds this quarter. The publicly traded corporation’s satellite-TV wing DirecTV went the opposite way, posting 346,000 net loses in traditional video subs. DirecTV Now added 49,000 customers.

Turner and HBO experienced year over year subscription revenue growth, their new parent said. Warner Bros. TV licensing revenue grew in Q3 2018.

This summer, Warner Bros. released movies “Crazy Rich Asians,” “The Meg” and “The Nun.”

Also Read: WarnerMedia Shuts Down DramaFever Streaming Service

All in all, Randall Stephenson is “pleased.”

“I’m pleased with the progress we made on a number of fronts in the third quarter,” the AT&T chairman and CEO said in a statement accompanying this morning’s financials. “Our U.S. wireless business is growing and it’s the single biggest contributor to our earnings and cash flow. WarnerMedia was immediately accretive in its first full quarter, contributing 5 cents to EPS, and our free cash flow grew by double digits.

“We’ve accomplished all this while staying focused on managing our debt portfolio,” he continued. “We’re on track to get to the 2.5x debt-to-EBITDA range by year-end 2019. And as we’re nearing completion of our fiber build and making pricing moves on video, we’re laying the foundation for stabilizing our Entertainment Group profitability in 2019. Across the business, I like our momentum and feel confident that we’re on track to deliver on our plans.”

Also Read: Turner Shuts Down Super Deluxe

Shares of AT&T stock (T) closed Tuesday afternoon at $33.02, up 35 cents on the day. The U.S. stock markets reopen at 9:30 a.m. ET.

In June, AT&T closed its massive $85.4 billion acquisition of Time Warner, which brought CNN, HBO and Warner Bros. under the telecom company’s umbrella.

AT&T executives will host a conference call this morning at 8:30 a.m. ET to discuss the financial results in greater detail.

9 Biggest Billion-Dollar Entertainment and Media Deals in 2017 (Photos)

While all eyes were on AT&T's $85 billion acquisition of Time Warner, announced in late 2016 but facing an antitrust lawsuit from the Justice Department, there were plenty of other megadeals in media, tech and entertainment that kept investment bankers busy in 2017.

Here are some of the biggest deals of the year:
Getty Images
Disney to acquire most of 21st Century Fox for $52.4 billion

In a massive deal that could change the entertainment industry even more than AT&T-Time Warner, Disney announced plans to acquire Fox's film and TV studios and much of its non-broadcast television business, including regional sports networks and cable networks such as FX, FXX and Nat Geo. Disney would also pick up Fox’s stake in the European pay-TV giant Sky — and be better positioned to win regulatory approval to complete the acquisition of the 61 percent of the company it does not already own.
Discovery Communications agrees to buy Scripps Networks Interactive for $11.9 billion

The merger of two cable powerhouses brings together channels including Discovery, Science, Food Network and HGTV – and could give the combined company a stronger position as pay-TV continues to migrate to the internet.
Discovery/Scripps
Sinclair Broadcast Group agrees to buy Tribune Media for $3.8 billion

This deal, if approved, would give conservative-leaning Sinclair control of 223 stations in 108 markets, including 39 of the top 50, covering 72 percent of households in the country. And it's only possible under rule changes implemented by new FCC Chairman Ajit Pai.
Sinclair/Tribune
Cineworld offers to buy Regal Cinemas for more than $3 billion

After a string of movie theater mergers last year, the sector has quieted down -- along with the box office. And while this isn’t yet a done deal -- or even an accepted offer -- British chain Cineworld made a late November bid of $23 a share for the U.S.’s No. 2 cinema chain.
Cineworld/Regal
Meredith Corp. acquires Time Inc. for $2.8 billion

The magazine megadeal is a sign of changing times in the publishing industry, with the owner of esteemed brands like Time, Fortune and Sports Illustrated selling to the parent of Better Homes and Gardens and Country Life – backed by $650 million from big-time conservative donors the Koch brothers.
Meredith/Time
Verizon acquires Straight Path Communications for $2.3 billion

Straight Path may not be a household name, but it was the subject of a bidding war between AT&T and Verizon. The company is one of the largest owners of millimeter wave spectrum, seen as key to the buildout of 5G networks, which should power much faster mobile internet -- better for video -- in the near future.
Verizon/Straight Path
Disney buys the rest of BAMTech for $1.6 billion

The Mouse House jumped into internet TV in a major way in 2017, announcing upcoming Disney and ESPN-branded streaming services and acquiring the rest of streaming tech company BAMTech to power those products.
Disney/BAMTech
Entercom buys CBS Radio for $1.5 billion

CBS Radio was intended to be spun off from its broadcast parent in an IPO, but instead it was scooped up by a competitor. The combined company, now the second largest radio business in the country, owns and operates 244 stations in 47 markets.
Entercom/CBS Radio
MGM buys the rest of Epix for $1 billion

The independent studio went all in on the pay-TV business, buying the rest of the premium cable network from Viacom and Lionsgate. And that's paid immediate dividends, as MGM's media networks division propelled it to a strong third quarter.
MGM/Epix

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Rewind 2017: Media and content consolidation continued this year

While all eyes were on AT&T's $85 billion acquisition of Time Warner, announced in late 2016 but facing an antitrust lawsuit from the Justice Department, there were plenty of other megadeals in media, tech and entertainment that kept investment bankers busy in 2017.

Here are some of the biggest deals of the year:

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9 Biggest Billion-Dollar Entertainment and Media Deals in 2017 (Photos)

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