AT&T consolidated revenues up 2.7% in first quarter

John Stankey - AT&T 16.9.jpg

AT&T's consolidated revenues reached US$43.9 billion in the first quarter, representing an increase of 2.7%.

CEO John Stankey (pictured) said growth in the mobility, fibre and HBO Max businesses was central to the company's overall performance. AT&T shares gained 5.3% to $31.70 in morning trading, Thursday.

“We continued to excel in growing customer relationships in our market focus areas of mobility, fibre and HBO Max,” Stankey commented.

“We had another strong quarter of postpaid phone net adds, higher gross adds, lower churn and good growth in Mobility EBITDA. We also continue to increase penetration in markets where we offer fiber broadband and we’re moving quickly to deploy more fibre. HBO Max continued to deliver strong subscriber and revenue growth in advance of our international and AVOD launches planned for June,” he added.

In mobility, there were 595,000 post-paid phone net adds – more than double what analysts were expecting – and 207,000 prepaid phone net adds, driving revenues up 9.4%, while service and equipment revenues increased 0.6% and 45.2% respectively.

Operating income stood at $6 billion, a 3.7% increase on Q1 last year. However, net debt increased to $169 billion at the end of the quarter, in part due to spectrum purchases.

Consumer wireline saw 235,000 net adds with penetration exceeding 35%. IP broadband revenues were up 4.6% with ARPU growth of 3.2%. However, business wireline saw revenues fall 3.5% to $6 billion, which AT&T said was due to "ongoing cost efficiencies in our network operations through automation and reductions in customer support expenses through digitalisation".

AT&T's own digitalisation saw operating expenses decline 3.6% year over year to $5 billion, but the digitalisation of its customers reduced demand for legacy services as customers shifted to more advanced IP-based offerings.s

More than 650,000 US business buildings are connected to AT&T fibre, reaching 2.5 million business customer locations.

The real showstopper, however, was HBO and HBO Max – the latter of which launched last year – which saw new domestic subscribers top 2.7 million. Total domestic subscribers now sit at 44.2 million with nearly 63.9 million globally, this compares to more than 100 million for Disney+ and 207.6 million for Netflix.

The growth followed the decision to air theatre releases on streaming services during the pandemic and part of the strategy will remain in place next year. Announcing the results, WarnerMedia CEO Jason Kilar said releases scheduled for 2022 will return to theatres, but some will be offered on the same day on HBO Max.

Revenue for WarnerMedia increased 9.8% to $8.5 billion.