AT&T Reports Mixed Q1 Results As WarnerMedia Offsets Pay-TV Decline

Dade Hayes

AT&T reported mixed first-quarter results, with a solid showing at WarnerMedia offsetting ongoing declines at DirecTV and its streaming offshoot, DirecTV Now.

Total revenue of $44.8 billion fell shy of consensus estimates for $45.1 billion. Earnings per share of 86 cents met expectations and rose a penny from the year-ago quarter.

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WarnerMedia, home of Turner, Warner Bros. and HBO, reported results on a pro-forma basis. It posted $8.38 billion in revenue, just below analysts’ estimates of $8.45 billion but up from $8.1 billion in the year-ago quarter. But the operating income grew 11.6% to $2.24 billion, with margins still at a healthy 26.8%.

Skinny-bundle offering DirecTV Now lost 83,000 subscribers, which was slightly more than analysts had expected. On the traditional TV bundle side, AT&T reported 22.4 million subscribers and a 544,000 net loss in the period across DirecTV and U-verse cable.

“Our first-quarter results show that we’re delivering on what we promised,” CEO Randall Stephenson said. “We’re on plan to meet our de-leveraging goals with strong free cash flow and asset sales.” The quarterly performance, he added, “speaks volumes about our focus on our strategic priorities.”

AT&T officially closed the books on the $81 billion Time Warner acquisition last June, meaning the purest quarterly comparisons are still a ways off. After the government in February relented in the appeal of its lawsuit seeking to block the merger, the parent company initiated a series of restructuring moves. Saddled with $170 billion in net debt as of the end of 2018, AT&T is racing to lower its leverage through various means. It has set deals this month to unload a 10% stake in Hulu and office space at 30 Hudson Yards, the new headquarters in New York for WarnerMedia and reported a debt reduction of $2.3 billion in the first quarter.

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