The Dallas-based company added 691,000 regular monthly phone subscribers in the first quarter, exceeding the 437,000 that analysts predicted.
AT&T posted earnings, excluding some items, of 77 cents a share on $38.1 billion in sales. Analysts predicted 75 cents on revenue of $37.7 billion.AT&T made a well-timed exit from the media and streaming business this month ahead of Netflix Inc.’s disappointing results Tuesday that knocked down the value of nearly all of the streaming-service companies. AT&T spun off and merged its WarnerMedia division with Discovery Inc. to create Warner Bros. Discovery.
HBO and HBO Max, now part of Warner Bros. Discovery, have a total of 76.8 million subscribers worldwide, up 3 million last quarter. In the U.S., HBO and HBO Max have 48.6 million customers. Analysts expected domestic subscribers to be 48.8 million. The average U.S. HBO monthly bill was $11.24. Free cash flow fell to $700 million from $4.2 billion a year earlier, a number that included $1.8 billion payment from DirecTV. The company is using cash to spend heavily on its 5G network buildout and is still expecting to generate $16 billion in free cash flow this year. The company still sees generating $20 billion in cash flow next year.
AT&T’s first-quarter net debt grew to $169 billion from $156.2 billion in the fourth quarter. The company received $40 billion in the Discovery merger, which it plans to use toward debt pay down. AT&T shares rose 0.8% in early morning trading. The stock had gained 4.7% this year through Wednesday’s close, matching phone company peer Verizon Communications Inc., while trailing T-Mobile US Inc., which rose 14%.