AT&T’s total revenue of $44 billion rose nearly 8% from the same period last year, surpassing analysts’ consensus estimate of $42.6 billion. Earnings per share rose 7% to 89 cents, well above analysts’ expectations of 79 cents.
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Bee WarnerMedia, revenue increased 31% to $8.8 million in the quarter ended June 30, as comparisons to the 2020 raw quarter turned favorable. Advertising revenue rose 49% as sports took shape again.
Several Warner Bros film titles scored during the quarter, both in theaters and on HBO Max, as the studio continued its day-and-date release strategy. Godzilla vs. Kong, which was released the day before the start of the quarter, accumulated the bulk of its returns during the period.
HBO Max, which launched in May 2020 during the coronavirus pandemic, now has the 67 million subscribers worldwide. AT&T increased its subscriber guidelines to between 70 and 73 million subscribers by the end of 2021. (Previously, the number was 67 million to 70 million.)
At the end of the second quarter of 2020, HBO and HBO Max had 36.3 million subscribers and 55.6 million worldwide. The company said in its earnings release that its domestic HBO/HBO Max subscriber base consists of US accounts “with access to HBO Max (including wholesale subscribers who may not be signed in).” AT&T has bundled access to the stream service with various subscription packages for wireless and pay TV, in addition to making the product available as a direct retail product through a number of distribution points.
WarnerMedia’s strong performance came when AT&T announced a spin-off of the entertainment company into a merged entity that would come under the control of Discovery. That deal, which was unveiled in May, is expected to close in mid-2022.
Some rivals have reached a bigger scale than WarnerMedia in the streaming chase. Disney has reached nearly 104 million subscribers with Disney+ and Netflix reported 209 million worldwide this week. But the average revenue per user for HBO Max is near the head of the industry class. At $15 a month, it’s positioned as a more robust offering, especially with the day-and-date Warner Bros titles, though the movie slate will return to many exclusive theater shows in 2022 before streaming.
In addition to the WarnerMedia-Discovery plan, the spin-off of DirecTV in a new company in which private equity firm TPG will have a 30% stake is set to close in the coming weeks, AT&T said in its earnings report.
AT&T struggles to reduce its debt burden after swallowing DirecTV and Time Warner. Neither acquisition proved completely successful, leaving shareholders with tens of billions of losses.