AT&T earnings for the September quarter met analyst estimates while revenue came in above Wall Street targets, although woes continued at WarnerMedia and its DirecTV satellite TV business. AT&T stock surged as wireless subscriber additions were a bright spot.
The telecom and media conglomerate said third-quarter profit fell 19% to 76 cents a share from a year earlier. AT&T (T) said revenue dropped 5% to $42.3 billion.
Analysts had projected AT&T earnings of 76 cents a share on revenue of $41.61 billion. A year earlier, AT&T earned 94 cents a share on revenue of $44.59 billion.
WarnerMedia revenue fell 10% to $7.5 billion amid an advertising drop at Turner broadcasting and delayed movie releases.
AT&T stock jumped 5.5% to 29.20 in early trading on the stock market today.
AT&T Earnings: Stock Lags Despite Dividend
Despite its 7% dividend, AT&T stock has dropped about 30% in 2020 as investors focus on its high debt and execution issues after an acquisition spree.
AT&T stock has retreated recently on worries over aggressive promotions for the new 5G-ready Apple (AAPL) iPhones. Also, the launch of the HBO Max video streaming service in May has so far failed to improve investor sentiment.
AT&T said it had 38 million HBO and HBO Max subscribers at the end of the quarter, up from 36.3 million in the June quarter.
During the quarter, AT&T said it added 645,000 postpaid wireless phone customers, including 151,000 subscribers that stopped paying but were kept on the network to comply with government programs.
The company's entertainment unit continues to struggle. AT&T said it lost 590,000 pay-TV subscribers, mostly at its DirecTV satellite business. In addition, AT&T lost 37,000 internet video subscribers.
Heading into the AT&T earnings report, the telecom stock had a poor Relative Strength Rating of 3 out of a possible 99.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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