AT&T stated Wednesday it experienced taken a $fifteen.5 billion writedown on its ailing DirectTV company, overshadowing progress in its HBO Max streaming and main wireless expert services.
The disclosure of the writedown arrived as AT&T reported that it missing another 617,000 quality Television set subscribers in the fourth quarter, highlighting the continuing plight of DirectTV amid the shift away from classic shell out Television set to streaming.
AT&T now has 16.5 million quality Television set prospects, down from more than 25 million in early 2017.
The company attributed the writedown to “competition, lessen gross provides from the continued concentrate on including larger price prospects, and a programming dispute, partly offset by lessen churn.” But Reuters stated it mirrored “the effect of several years of twine-slicing in the marketplace as viewers transfer to less costly online streaming expert services.”
The writedown assisted thrust AT&T into a fourth-quarter web reduction of $13.88 billion, or $one.95 for every share. Complete working income was $45.sixty nine billion, beating analysts’ estimates of $44.fifty six billion.
“We finished the 12 months with strong momentum in our marketplace concentrate regions of broadband connectivity and software package-dependent enjoyment,” CEO John Stankey stated in a information launch. “By investing in our significant-good quality wireless shopper base, we experienced our ideal comprehensive-12 months of postpaid phone web provides in a decade and our second lowest postpaid phone churn ever.”
All through the fourth quarter, AT&T added 800,000 web new phone subscribers who shell out a every month bill, beating analyst anticipations of 475,three hundred provides. HBO Max finished 2020 with seventeen million activated accounts but income from the WarnerMedia division fell nine.5% as the exhibit-company side continued to wrestle with small box-business office income and weak advertising income.
“Our biggest and one-most significant wager is HBO Max,” Stankey explained to analysts on an on earnings simply call. Executives plan to expand the service’s footprint in other nations this 12 months and start an advertising-supported version in the second quarter.
In accordance to The Wall Avenue Journal, AT&T has been seeking to unload DirecTV, holding conversations with suitors like personal-equity agency TPG. A deal “could allow AT&T to deconsolidate DirecTV’s worsening fiscal effects whilst retaining a stake in the Television set company,” the Journal stated.