AT&T Earnings: Warner Bros Revenue Falls 21% With Hybrid ‘Wonder Woman 1984’ Release

WarnerMedia parent company beats Wall Street’s tempered expectations to end 2020

Wonder Woman 1984
Courtesy of Warner Bros. Inc.

Warner Bros.’s fourth-quarter 2020 revenue fell 21% from the prior year with the hybrid-style release of “Wonder Woman 1984,” parent company AT&T said on Wednesday.

At least the streaming availability of “WW84” on HBO Max, a rollout strategy that can be pinned on the coronavirus pandemic, helped accelerate sign-ups for the service. HBO Max and HBO topped 41 million combined U.S. subscribers at the end of 2020, AT&T said this morning, beating the company’s initial projection by two years. HBO Max “activations” doubled since the end of Q3 2020 to 17.2 million as of end of its Q4, partially driven by the Dec. 25 launch of “Wonder Woman 1984” on the streaming service.

“Wonder Woman 1984,” which was released on Christmas Day, has made shy of $150 million at the worldwide box office, according to Box Office Mojo. Domestically, it opened (in a limited capacity, of course) to $16.7 million. “Wonder Woman” (2017) made more than $800 million worldwide and had a domestic opening north of $100 million.

Wall Street had forecast AT&T Q4 earnings per share (EPS) of 73 cents on $44.55 billion in revenue, according to a consensus estimate compiled by Yahoo Finance. AT&T actually reported adjusted EPS of 75 cents on $45.7 billion in revenue.

So the phone company beat both expectations, though they each declined from the fourth quarter of 2020. Speaking of phones, the former Ma Bell saw its mobility revenue rise nearly 8% in Q4. AT&T lost another 617,000 TV video customers over those 90 days, however.

Overall, the WarnerMedia segment’s revenue declined 9.5%. HBO rose thanks to all that new subscription revenue, helping to offset some of the Warner Bros. declines. Turner was just slightly down from the comparable three-month period in 2020.

“We ended the year with strong momentum in our market focus areas of broadband connectivity and software-based entertainment,” John Stankey, AT&T CEO, said in a prepared statement accompanying the company’s financials. “By investing in our high-quality wireless customer base, we had our best full-year of postpaid phone net adds in a decade and our second lowest postpaid phone churn ever. Our fiber broadband net adds passed the 1 million mark for the year. And the release of ‘Wonder Woman 1984’ helped drive our domestic HBO Max and HBO subscribers to more than 41 million, a full two years faster than our initial forecast.”

Stankey and his fellow top AT&T executives will host a conference call at 8:30 a.m. ET to discuss the latest quarter and full-year 2020 in greater detail.

AT&T stock (T) closed Tuesday at $29.75 per share. The U.S. stock markets will reopen at 9:30 a.m. ET.


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