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AT&T earnings and sales increased as the company saw a recovery from COVID-19


AT&T Inc. Strong wireless subscriber growth was reported on Thursday and shows that its WarnerMedia business is continuing to recover from the effects of the pandemic.

The company earned 86 cents a adjusted share on $ 43.9 billion in first quarter revenue, up from 84 cents in adjusted earnings per share and $ 42.8 billion in revenue a year ago. there. Both indices topped the FactSet consensus, as analysts predicted 78 cents in adjusted EPS and $ 42.7 billion in revenue.

Shares of AT&T
T,
+ 3.84%

was up 3.9% in afternoon trading according to the report.

AT&T recorded $ 19.0 billion in revenue from the mobile segment, up 9.4% from a year earlier. While service revenue grew only 0.6%, with subscriber growth largely offset by continued pressure on international roaming amid a pandemic, AT&T equipment sales rose 45.2 % because AT&T benefits from a greater mix of higher priced smartphones. The latest results also benefit from a comparison with results from a year ago that saw stores temporarily shut down due to the onset of the COVID-19 crisis.

The company’s promotional strategies seem to be delivering the desired effect as AT&T found 595,000 additional postpaid phones in the quarter and the postpaid phone disruption rate was 0.76%, down from zero, 86% a year earlier. Among the major wireless companies in the US, AT&T is the most focused since the launch of the latest iPhone on offering promotions aimed at promoting upgrades from existing customers, rather than primarily targeting On the customer will switch from another carrier.

AT&T has increased its investment in upgrade offers for existing subscribers after previously “undeveloped” in the field, AT&T Communications CEO Jeff McElfresh told MarketWatch. The company was able to save costs from elsewhere in the unit, such as switching to public cloud infrastructure from on-premises data centers and dedicating part of that money to single efforts. customer maintenance, he explains.

In general, AT&T hopes to get into the wireless space and “make it profitable,” he continued.

McElfresh also calls for simplification of the company’s various plans, meaning a smoother experience for consumers trying to understand which wireless plan to buy, as store partners are explaining. about them.

WarnerMedia’s business revenue reached $ 8.5 billion, up 9.8% from a year earlier as subscription, advertising, and content revenue grew. AT&T had 44.2 million subscribers to the domestic HBO Max streaming at the end of the quarter, up from 41.5 million at the end of the fourth quarter.

AT&T has succeeded in bundling services such as broadband, wireless, and HBO Max. “It’s like a futuristic entertainment product and service combined with broadband, where we know that when we combine, we slow down,” said CEO John Stankey. during AT&T income call.

McElfresh told MarketWatch that AT&T customers for all three services were “the most satisfied, the least disruptive.”

In Warner Media, ad revenue grew 18.5% as the return of the NCAA men’s basketball tournament helped the company’s cable TV networks grow.

Maintaining the wireless momentum and building the HBO Max is one of AT & T’s biggest strategic priorities, along with growing its fiber-optic business. The company added 235,000 AT&T Fiber customers in the most recent quarter.

McElfresh said that AT&T “endorsed” the infrastructure plan proposed by President Joe Biden to bring high-speed broadband to the American countryside, and that the company is “encouraging the government to do so. a smart way.” He argued that efforts to expand broadband access “are often more impressive when you have the scale to support deployment” and public-private partnerships, as well as collaboration in the telecom industry, can help drive successfully pushed.

See more: Biden’s infrastructure plans seeks to solve the long-term problem with the Internet, but will face familiar opposition.

AT&T continues to expect consolidated revenue growth of around 1% for the full year, with earnings per share adjusted for a stable year over year 2020. The company has revised its capital investment forecasts and is currently projecting is about $ 22 billion in total capital investment, with capital costs of about $ 17 billion. In previous AT&T reports, the company estimated total investment of about $ 21 billion and cost of capital $ 18 billion.

AT&T shares have risen 8.8% so far, while exchange-traded fund communications services SPDR
XLC,
-0.75%

rose 11.9% and the S&P 500 index
SPX,
-0.79%

increased 10.1%.

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