AT&T mentioned the discharge of “Surprise Lady 1984” helped HBO Max double activations — to 17.2 million — within the fourth quarter of 2020. However a 21% decline in Warner Bros. income for This fall, in addition to different COVID-related impacts, pulled down the corporate’s income down and earnings for the quarter.
On the finish of 2020, WarnerMedia had 41.5 million HBO Max and HBO home subscribers, up 20% from 34.6 million a yr prior. AT&T mentioned it hit the quantity two years quicker than its preliminary forecast. Of the 37.7 million HBO Max-eligible subs, 30.785 million got here via wholesalers (like Comcast) and 6.88 million had been via retail. Meaning nearly half (46%) of HBO subscribers who had been eligible to get HBO Max had not signed up but.
The corporate mentioned it invested about $800 million in HBO Max within the fourth quarter and greater than $2 billion for the yr on the streaming service.
AT&T blamed COVID for $1.6 billion in decrease theatrical and TV income within the fourth quarter. Throughout the quarter, the telco took a $780 million cost associated to the impairment of manufacturing and different content material stock at WarnerMedia, with $520 million ensuing from the continued shutdown of theaters through the pandemic and “the hybrid distribution mannequin for our 2021 movie slate.” WarnerMedia plans to launch all motion pictures on the Warner Bros. slate day-and-date on HBO Max and in theaters.
Warner Bros. This fall income was $3.2 billion, down 21.2%, pushed by the postponement of theatrical and home-entertainment releases. The corporate additionally blamed the “limited-capacity and hybrid HBO Max distribution launch of ‘Surprise Lady 1984′” for the drop, in addition to decrease TV licensing and manufacturing income harm by COVID-related manufacturing delays. Word that “Surprise Lady 1984” was streaming on HBO Max for under a month: It left the service on Jan. 24.
HBO income for This fall was $1.9 billion, up 11.7%, pushed by development in subscription revenues primarily on account of larger HBO Max direct-to-consumer subscribers within the U.S. and the Might 2020 acquisition of the remaining curiosity in HBO Latin America Group. Revenue at Turner was $3.2 billion (down 0.6%), which the corporate attributed primarily to the delayed begin of the NBA season.
In the meantime, AT&T’s pay-TV enterprise continued to endure: The telco had a internet lack of 617,000 DirecTV and AT&T TV premium video subscribers in This fall, whereas AT&T TV Now (which is being phased out) dropped 27,000. On the finish of 2020, AT&T reported 17.2 million video connections — down 16% from 20.4 million a yr earlier. The telco boasted sturdy positive aspects in broadband fiber connections, which rose 1 million in 2020 (27%) to face at 4.95 million at year-end.
Total, AT&T’s This fall income was $45.69 billion (down 2.4% yr over yr), barely beating analyst expectations. Along with the decline at WarnerMedia, U.S. wi-fi service revenues had been “pressured from decrease worldwide roaming,” offset by larger wi-fi tools gross sales, AT&T mentioned. AT&T reported 800,000 postpaid cellphone internet provides for This fall and 1.46 million for the complete yr, the telco’s highest annual complete since 2011.
AT&T’s adjusted earnings per share of 75 cents (down from 89 cents within the year-ago quarter) topped Wall Road analyst expectations by 2 cents. The telco’s long-term debt on the finish of 2020 was $153.8 billion — a lot of that from the Time Warner and DirecTV offers — versus $151.3 billion a yr earlier.
For 2021, AT&T forecast income development of about 1% and wi-fi service income development of two% amid “gradual enchancment” at WarnerMedia, in addition to “secure adjusted EPS.” The corporate expects decrease income from the “continued partial closure of film theaters and better prices based mostly on our choice to distribute movies in 2021 on HBO Max within the U.S. simultaneous with theaters for 31 days.”