AT & T Inc.'s new show business portfolio outperformed its larger telecom business in the last quarter, boosting revenues despite a record drop in satellite TV subscriptions.
The Dallas Company's third-quarter profit rose to $ 4.72 billion. This was supported by mobile subscriber growth, more subscribers at HBO, and growing distribution revenues from Turner TV channels.
But the company lost 359,000 DirecTV satellite subscribers in the quarter, which was 13,000 subscribers to video subscribers in U -verse and 49,000 new subscribers to DirecTV Now a cable-like bundle of channels is being offered online.
DirecTV Now has slowed growth significantly, having gained several hundred thousand new customers in previous quarters. Some reasons for this were a new strategy to avoid bargain hunters using the service for a few months to follow a particular TV series or sport.
"We take a more customized, data-driven approach," AT & T Communications CEO John Donovan said in a conference call with analysts about DirecTV Now. "We learned a lot from our two million customers about customer behavior and price elasticity."
Equities fell 6.1
AT & T's mobile business generated 69,000 postpaid phone concepts, which many investors view as a measure of wireless profitability. The company has added 481,000 net prepaid phone subscribers. Total domestic prepaid and postpaid customers reached 93.9 million, compared to 93.6 million in the previous quarter.
This was followed by similarly strong results in the competition from Verizon Communications Inc., which netted 295,000 new postpaid telephone calls on Tuesday over the same period. Most mobile service providers have avoided offering heavy rebates on wireless rates this year, and as a result have reported higher profits.
Telephone plans and Internet service still dominate most of AT & T's profits, even though the company has aggressively invested in advertising and entertainment. In June, there were more than $ 80 billion for the owner of Warner Bros. Studios and a number of popular TV channels including CNN, HBO and TBS. AT & T has renamed the business to WarnerMedia.
The three months that ended on September 30th were the first full quarter of the telecom company's ownership and helped to improve the result. Operating income increased 11% as a result of subscriber growth at HBO and increased 13% for Turner TV due to higher subscription fee revenues for cable and satellite providers.
AT & T's total profit rose to $ 4.72 billion, or 65 cents per share, from the $ 3.03 billion or 49 cents a share it had earned a year before without WarnerMedia. His revenue climbed from $ 39.67 billion a year ago to $ 45.74 billion.
Chief executive Randall Stephenson told investors in September that losses on pay-TV subscribers flattened after a year of steep declines, though he said the loss-making division maintains that DirecTV will not stabilize until next year.
Traditional subscriptions to TV channels are falling across the industry as more and more viewers switch to cheaper online packages or omit live TV altogether. These cable-cut packages are less profitable for their suppliers than satellites and cables.
Write to Drew FitzGerald at email@example.com