AT&T Inc (NYSE: T) stock fell over 0.3% on Jan 28th, 2021 pre-market session (Source: Google finance) as company has written down its premium TV business, which includes satellite television unit DirecTV, by $15.5 billion, reflecting the impact of years of cord-cutting in the industry as viewers move to cheaper online streaming services.
The company has entered into exclusive talks to sell a minority stake in DirecTV to private equity firm TPG in a deal. The company said it also took a $780 million write-down on its WarnerMedia business driven by the pandemic causing shutdowns on content production and viewers staying away from cinemas. During the fourth quarter, T had added 800,000 net new phone subscribers who pay a monthly bill, beating analyst expectations of 475,300 customers, according to research firm FactSet. WarnerMedia, the unit that includes HBO Max, delivered revenue of $8.6 billion, down from $9.5 billion in the year-ago quarter. AT&T now has 41.5 million U.S. subscribers for both its premium TV channel HBO and streaming service HBO Max in the fourth quarter, up from 38 million the previous quarter. AT&T has suffered a net loss during the quarter of $13.88 billion
T in the fourth quarter of FY 20 has reported the adjusted earnings per share of 75 cents, beating the analysts’ estimates for the adjusted earnings per share of 73 cents, according to Zacks Investment Research. The company had reported the adjusted revenue of $45.69 billion in the fourth quarter of FY 20, beating the analysts’ estimates for revenue of $44.56 billion. The COVID-19 pandemic has affected revenues across most businesses, particularly WarnerMedia and domestic wireless service revenues, which were pressured from lower international roaming. For the quarter, revenue declines included domestic video, Warner Bros. television and theatrical products, legacy wireline services, and Latin America, which includes foreign exchange pressure. These declines were however partly offset by higher domestic wireless revenues, mainly from equipment sales. The company has generated Cash from operating activities was $10.1 billion, and capital expenditures were $2.4 billion. Gross capital investment were of total $4.3 billion. The company has generated free cash flow of $7.7 billion for the quarter. Net debt declined by $1.6 billion sequentially in the fourth quarter.
The company expects 2021 revenue growth to be in the range of 1%, and adjusted earnings per share to be similar to the previous year.