AT&T Inc.’s quarterly revenue and phone subscriber additions beat market expectations on Thursday, on increased demand for its phone and internet service and steady growth for its streaming platform HBO Max.
The US wireless carrier is working to unwind its years-long journey to become an entertainment powerhouse in order to pay down debt and direct investment to its original business of providing phone and internet services, Reuters reported.
These investments have paid off as the wireless carrier added 928,000 net new phone subscribers who pay a monthly bill during the third quarter, well above consensus expectations of 560,000, according to data from research firm FactSet.
Rival carrier Verizon added 429,000 subscribers in its latest quarter.
Total revenue was $39.9 billion in the third quarter, exceeding analysts’ average estimate of $39.14 billion, according to IBES data from Refinitiv.
In May, AT&T announced it would spin off its WarnerMedia unit in a $43 billion deal with Discovery, marking the end of its goal to become an entertainment company. AT&T said it expects the deal to close by mid-2022.
Its premium TV channel HBO and streaming service HBO Max continue to grow as viewers flocked to watch new television shows like “White Lotus” and movies, including “Space Jam: A New Legacy” and “The Suicide Squad”. Total global subscribers for both services grew by 1.9 million from the previous quarter to 69.4 million.
American subscribers for the services totaled 45.2 million during the third quarter, down from 47 million in the previous quarter, after HBO was removed from Amazon Prime Video in September.
Revenue for WarnerMedia was $8.4 billion during the quarter.
Net income attributable to the company’s common stock rose to $5.9 billion, or 82 cents per share, in the quarter, from $2.8 billion, or 39 cents per share, a year earlier.
AT&T’s total debt was $179.2 billion as of September 30.
The company said it expects full-year adjusted earnings per share to be at the high end of the low-to-mid single-digit growth range. It also expects to reach the higher end of its HBO and HBO Max global subscriber target of between 70 million to 73 million by the end of this year.