AT&T Inc. (NYSE:T) reported a drop in its profit for the second quarter, what the telecom and media giant attributes to effects of the COVID-19 and a market overcrowded by satellite-TV. The growing competition from satellite TVs has led the company to hold on from launching its video streaming services.
According to the company’s Q2 earnings report, AT&T reported a drop in its EPS to $0.83 from $0.89 reported during the same period last year. AT&T however, beat analysts’ consensus forecast for $0.79. The company reported $41 billion in revenue, representing a 9% drop from what it reported during the same period last year. According to the telecom company, the COVID-19 pandemic led to around $2.8 billion drop in revenue.
AT&T counting on wireless and broadband businesses to escape the effects of pandemic
The results are from when the pandemic brought business operations to a halt as countries imposed lockdowns and other restrictive health protocols to curb its spread. The company has been able to wade off the effects of the economic onslaught caused by the pandemic thanks to its wireless and broadband businesses. AT&T has seen a growing demand for its wireless and broadband services during the pandemic, as many people and businesses turn to online services.
COVID-19 having a heavy blow on WarnerMedia and Pay-TV
The pandemic is having a heavy toll on Pay-TV, which has lost around 886,000 subscribers and WarnerMedia, which has reported a 23% drop in revenue. Following the drop, Pay-TV has been left with 17.7 million subscribers. On the other hand, WarnerMedia reported a 23% drop in revenue to $6.8 billion. The company’s operating profit plunged 18% to reach $1.9 billion.
AT&T’s HBO and HBO Max had 36.3 million subscribers in the U.S as of June 30. This is an increase from 34.6 million reported in December 2019. HBO and HBO Max is AT&T’s enlarged streaming video service built around its premium TV brand.
Although Warner Bros was unable to release a movie during this lucrative spring and early summer due to the pandemic, the company only reported a slight drop of 4% in revenue to $3.3 billion. An increase in television revenue offset the drop in revenue from movies.