AT&T Inc. topped expectations with its first-quarter earnings and revenue Thursday morning as the company benefited from a greater demand for higher-priced smartphones and saw some recovery in its WarnerMedia business from the impacts of the pandemic.
The company posted net income of $7.5 billion, or $1.04 a share, up from $4.6 billion, or 63 cents a share, in the year-earlier period. After adjusting for factors such as an actuarial gain on benefit plans and amortization costs related to merger activity, AT&T T,
Revenue for the first quarter climbed to $43.9 billion from $42.8 billion a year earlier, with AT&T attributing the increase to higher mobility revenue and higher Warner Media revenue, which helped offset declines in the company’s domestic video, business wireline, and Latin America categories. Analysts tracked by FactSet were expecting $42.7 billion in revenue for the quarter.
Shares were up 2.0% in premarket trading Thursday.
The company recorded $19.0 billion in mobility revenue, up 9.4% from a year earlier. Service revenue grew just 0.6% as subscriber gains were largely offset by continued pressure on international roaming revenue given the pandemic’s impact on global travel. Equipment revenue rose 45.2% as AT&T benefited from a greater mix of higher priced smartphones and saw its results compared with a year-ago period that saw temporary store closures due to the beginning of the COVID-19 crisis.
AT&T pointed to 595,000 postpaid phone net additions for the quarter and a postpaid phone churn rate of 0.76%, which was down from 0.86% a year prior.
Revenue for the WarnerMedia business came in at $8.5 billion, up 9.8% from a year earlier as subscription, advertising, and content revenue grew. AT&T had 44.2 million domestic HBO Max streaming subscribers as of the end of the quarter, up from 41.5 million at the end of the fourth quarter.
Within Warner Media, advertising revenue was up 18.5% as the return of the NCAA men’s basketball tournament gave the company’s cable networks a boost.
AT&T continues to expect consolidated revenue growth of about 1% for the full year, along with stable adjusted earnings per share relative to 2020. The company tweaked its capital-investment projections and now anticipates about $22 billion in gross capital investment, with capital expenditures of around $17 billion. In AT&T’s prior report, the company projected roughly $21 billion in gross capital investment and $18 billion in capital expenditures.
