AT&T’s wireless growth stung by tablet losses, but Aquaman did great

AT&T CEO John Donovan talking about its 5G plans.

Sarah Tew/Techhnews

In hindsight, AT&T’s Time Warner acquisition is looking pretty good right now.

The business, now renamed WarnerMedia, gave AT&T a few things to crow about, including operating income growth of 33.2 percent, as well as a strong slate of film releases like the blockbuster Aquaman and strong digital subscriber growth for HBO.

Offsetting that positive news, however, were continued drags on its more legacy businesses. The company only added 134,000 phone customers on a post-paid basis, or people who pay their bills at the end of the month, in the fourth quarter. In total, it only added 13,000 post-paid customers thanks to a loss of 410,000 tablets and other connected computing devices after scaling back its promotions.

In comparison, Verizon yesterday posted 653,000 net new phone customers in the fourth quarter.

On the video side, it lost 391,000 traditional pay TV customers and 267,000 DirecTV Now. DirecTV Now took a big hit after AT&T raised its prices, and the company says essentially no customers are on discounted plans anymore.

The results underscore AT&T’s awkward lurch forward as a company in the midst of transformation. The company wants to be an entertainment powerhouse, but also must keep an eye on its more traditional services business.

Its wireless business has struggled enough that the company has resorted to touting the broad deployment of 5G E service, which is not 5G, but suggests a level of network superiority over other carriers that doesn’t exist. AT&T says it’s proud that it renamed its 4G service 5G E.

Yet the company could count a number of successes in its entertainment business, including A Star is Born and Crazy Rich Asians. Aquaman, which premiered at the end of December, was another standout, and is the first DC Extended Universe film to cross the $1 billion mark.

For the period, the Dallas telecom giant said it posted a net profit of $4.9 billion, or 66 cents a share, compared with a year-earlier profit of $19 billion, or $3.08, which was helped by the government’s tax reform. Excluding special items, the company posted adjusted earnings per share of 86 cents.

Revenue, meanwhile, was at $48 billion.

Analysts, on average, forecast earnings of 86 cents a share and $48.5 billion.

Sharers slipped 0.1 percent to $30.66 in pre-market trading.

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