27 Jan, 2021

AT&T turns Q4'20, full-year 2020 losses as COVID-19 cuts through HBO Max gains

AT&T Inc. reported net loss attributable to common stock of $13.94 billion, or $1.95 per share, in the fourth quarter of 2020, compared to net income attributable to common stock of $2.39 billion, or 33 cents per share, in the prior-year period.

The S&P Capital IQ GAAP EPS consensus estimate for the quarter ended Dec. 31, 2020, was 46 cents. Adjusting for $2.70, which includes asset impairments, an actuarial loss on benefit plans, merger-amortization costs and other items, the EPS was 75 cents compared to an adjusted 89 cents in the year-ago quarter.

The company did not adjust for COVID-19 impacts of negative 8 cents. However, the earnings include nearly $650 million, or 8 cents per share of COVID-19 impacts, including $90 million, or 1 cent per share, of cost reductions reflecting insurance recoveries associated with Warner Media LLC business disruption recoveries offset by additional incremental expense.

The company, which launched HBO Max in May 2020, reported 41.5 million U.S. subscribers for HBO Max and HBO (US) at Dec. 31, 2020. This compares with 34.6 million at Dec. 31, 2019.

Total operating revenues for the fourth quarter of 2020 totaled $45.69 billion, down 2.4% from $46.82 billion in the prior-year period.

AT&T said the COVID-19 pandemic affected revenues across all segments, particularly impacting Warner Media and roaming wireless revenues in the Communications segment. Revenues were also lower due to continued declines in domestic video and legacy wireline services and were impacted by Latin America foreign exchange pressure, it added.

For the 12 months ended Dec. 31, 2020, AT&T reported net loss attributable to common stock of $5.37 billion, or 75 cents per share, compared with net income attributable to common stock of $13.90 billion in the prior year. The S&P Capital IQ GAAP EPS consensus estimate for 2020 was $1.71.

For 2021, the company expects consolidated revenue growth in the 1% range and adjusted EPS to be stable with 2020. 2021 results are expected to be impacted by, among other things, lower revenues from the continued partial closure of movie theaters and higher costs due to AT&T's decision to distribute films in 2021 on HBO Max in the U.S. simultaneous with theaters for 31 days.