AT&T said it succeeded in steering most of its existing HBO subscribers to the new HBO Max app, partly with the help of its cable-TV partners.
Photo: David Paul Morris/Bloomberg NewsAT&T Inc.’s T -0.80% second-quarter profit fell as the coronavirus pandemic and an already unhealthy satellite-TV business overshadowed the launch of its make-or-break streaming video service.
The telecom and media giant reported about 36 million subscribers on HBO and HBO Max, an enlarged streaming video service built around the company’s premium TV brand. AT&T launched the new Max service in May, when a worsening coronavirus pandemic had already forced millions of U.S. viewers to hunker down at home and look for new shows to watch.
AT&T said it succeeded in steering most of its existing HBO subscribers to the new HBO Max app, partly with the help of its cable-TV partners. But the company remained at an impasse with Amazon.com Inc. and Roku Inc., two services that resell HBO, over advertising revenue sharing and other issues. HBO Max plans to launch an ad-supported version next year, when it will also expand to more countries.
AT&T’s shrinking traditional-TV business showed why the company needs its new online service to succeed. The division holding its DirecTV satellite unit lost 886,000 U.S. premium-TV subscribers and 68,000 online-only channel bundles. Its home broadband unit, which includes all but the slowest digital subscriber lines, posted a net loss of 102,000 subscribers.
The company also wrote down the value of its Vrio Latin American satellite-TV business, which has burdened its parent with slowing demand and unfavorable foreign currency exchange rates. The company lost 2.2 million connections after it closed DirecTV in Venezuela during the second quarter. Including that closure, the Latin American pay-TV unit ended June with about 10.7 million connections, down from 13.5 million a year earlier.
John Stankey, who took over as chief executive from longtime boss Randall Stephenson, said the $12.1 billion of cash from AT&T’s operations in the quarter is helping to support investments, 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,” he said.
AT&T’s core wireless business reported a loss of 151,000 postpaid phone subscribers, a figure that included 338,000 still-active lines that the carrier took off its rolls but avoided disconnecting under the federal government’s Keep Americans Connected pledge. That voluntary forbearance program ended in July after several telecom companies balked at footing the bill for more nonpaying accounts past the summer.
At the same time, the company posted a net gain of 135,000 prepaid phone customers, a sign of how many Americans’ economic distress is changing how they shop for wireless plans. Prepaid accounts tend to cost less than postpaid rate plans, which bill for monthly service after it Is provided.
Total profit fell to $1.23 billion, or 17 cents a share, compared with $3.71 billion, or 51 cents, a year earlier. Reported net income included a more than $2 billion impact from Vrio’s lower valuation, higher severance payment costs and other accounting adjustments. Overall revenue fell 8.9% to $40.95 billion.
AT&T pulled its long-term financial guidance earlier this year, citing broad economic uncertainty due to an expanding pandemic. The hazy forecast came alongside thousands of job cuts, many of which the company had planned for months as part of a workforce overhaul designed to trim its expenses.
The company said its annual dividend payout ratio—its total dividends divided by free cash flow—will end 2020 in the lower-60s range after falling to 49% in the second quarter.
The disruption caused by the virus mostly hurt WarnerMedia, which along with rivals Walt Disney Co. and Comcast Corp. ’s NBCUniversal, had to idle most TV and movie production and reschedule some theater releases. The media division also missed out on months of professional sports broadcasts, sapping its ad revenue.
Related Video
Write to Drew FitzGerald at andrew.fitzgerald@wsj.com
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
"TV" - Google News
July 23, 2020 at 07:21PM
https://ift.tt/2ORnibm
AT&T Profit Sags Under Pressure From Satellite TV, Covid-19 - The Wall Street Journal
"TV" - Google News
https://ift.tt/2T73uUP
Bagikan Berita Ini
0 Response to "AT&T Profit Sags Under Pressure From Satellite TV, Covid-19 - The Wall Street Journal"
Post a Comment