AT&T reported consolidated revenues for the third quarter of $42.3 billion, down 5% from $44.6 billion in the year-ago quarter. Third-quarter net income attributable to common stock was $2.8 billion, or $0.39 per diluted common share, versus $3.7 billion, or $0.50 per diluted common share, in the year-ago quarter.
AT&T said the COVID-19 pandemic impacted revenues across all businesses, particularly WarnerMedia and also domestic wireless service revenues, primarily from lower international roaming. For the quarter, revenue declines included domestic video, Warner Bros. television and theatrical products, legacy wireline services and Latin America due to foreign exchange pressure. These declines were partly offset by higher wireless equipment revenues and higher advertising revenues associated with timing shift of sports from the first half of 2020.
“We delivered a solid quarter with good subscriber momentum in our market focus areas of connectivity and software-based entertainment,” said John Stankey, AT&T chief executive officer. “Wireless postpaid growth was the strongest that it’s been in years with one million net additions, including 645,000 phones. We added more than 350,000 fiber broadband customers and are on track to grow our fiber base by more than 25% this year. And we continue to grow and scale HBO Max, with total domestic HBO and HBO Max subscribers topping 38 million — well ahead of our expectations for the full year. Our strong cash flow in the quarter positions us to continue investing in our growth areas and pay down debt. We now expect 2020 free cash flow of $26 billion or higher with a full-year dividend payout ratio in the high 50s%.”
Communications
Mobility:
- More than 5 million total domestic wireless net adds
- More than 1 million postpaid net adds, including 645,000 postpaid phones (phones include 151,000 Keep Americans Connected Pledge (KACP) paying accounts)
- 245,000 prepaid net adds, including 131,000 prepaid phone net adds
- Postpaid phone churn of 0.69%, significant improvement year over year (0.77% when excluding KACP paying accounts)
- Service revenues down 0.3% due to decline in international roaming; equipment revenues up year over year
- Fastest nationwide 5G network and, for the 7th consecutive quarter in a row, the fastest network in the nation
Entertainment Group:
- A record high 357,000 AT&T Fiber net adds and 158,000 total broadband net adds (includes 28,000 and 104,000 KACP paying accounts, respectively).
- Solid IP broadband and video ARPU gains
- AT&T TV gains helped offset premium TV loss
- 590,000 net loss, the result of lower churn and higher quality base (includes 116,000 KACP paying accounts)
WarnerMedia
- Total domestic HBO and HBO Max subscribers4 top 38 million and 57 million5 worldwide, respectively
- 38 million exceeds previously announced year-end target of 36 million
- HBO Max activations more than doubled from second-quarter levels
- HBO Max advertising-supported service on track to launch in 2021
- Industry-leading 38 Primetime and 15 News and Documentary Emmy Awards
- Results impacted by the COVID-19 disruption and return of sports programming in the quarter