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AT&T Posts Q4 Loss; But Results Beat Estimates

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AT&T Inc. (T) Wednesday reported a loss for its fourth-quarter compared to a profit in the prior year, due to non-cash asset impairments and impact of lower revenue. Quarterly revenues declined 2.4 percent, hurt by the COVID-19 pandemic across all segments.

Both quarterly adjusted earnings per share and revenue beat analysts' expectations.

In Wednesday pre-market trade, T was trading at $29.07, down $0.64 or 2.15 percent.

Looking ahead for 2021, the company expects adjusted earnings per share to be stable with 2020, consolidated revenue growth in the 1 percent range.

The company expects operating results and cash flows to continue to be adversely impacted by COVID-19 for the duration of the pandemic.

The company expects its 2021 results to be impacted by lower revenues from the continued partial closure of movie theaters and higher costs based on decision to distribute films in 2021 on HBO Max in the U.S. simultaneous with theaters for 31 days; the decline in revenues from international roaming wireless services due to reduced travel.

During the fourth quarter, total phone net adds were 760,000. Postpaid subscriber net adds were 1.2 million, with phone net adds of 800,000 and additions from wearables and non-tablet computing devices more than offsetting losses in tablets. Prepaid subscriber net adds were 14,000, with phone net losses of 40,000.

The company reported that its fourth-quarter net loss attributable to common stock was $13.94 billion or $1.95 per share, compared to net income of $2.39 billion or $0.33 per share in the year-ago quarter.

The latest-quarter results included $2.02 per share from the impairment of assets, $0.43 per share for non-cash losses for the annual adjustment related to pension and post-employment benefit accounting, $0.22 per share for the amortization of merger-related intangible assets, and a combined $0.03 per share for tax-related items, employee separation charges and other items.

Adjusted earnings per share for the fourth-quarter was $0.75 compared to $0.89 in the year-ago quarter. Analysts polled by Thomson Reuters expected the company to report earnings of $0.73 per share for the fourth-quarter. Analysts' estimates typically exclude special items.

Total operating revenues for the fourth-quarter were $45.69 billion, down 2.4 percent from $46.82 billion in the previous year. Analysts expected revenues of $44.55 billion for the fourth-quarter.

Revenues were impacted by the COVID-19 pandemic across all segments, most significantly contributing to lower content revenues at WarnerMedia 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.

Communications segment's, which consists of Mobility, Video, Broadband and Business Wireline business units, quarterly operating revenues were $36.7 billion, up 0.5 percent compared to fourth-quarter 2019.

Mobility revenues for the fourth quarter were $20.1 billion, up 7.6 percent versus the fourth quarter of 2019, primarily due to equipment revenue growth from higher upgrade volumes, the mix of higher-priced smartphones and sales of postpaid data devices, such as wearables, wireless modems and hotspots.

Warner Bros. revenues for the fourth quarter of 2020 were $3.2 billion, down 21.2 percent versus the year-ago quarter, driven by the postponement of theatrical and home entertainment releases and unfavorable comparisons to prior year.

HBO revenues for the fourth quarter of 2020 were $1.9 billion, up 11.7 percent versus the year-ago quarter, driven by growth in subscription revenues primarily due to the May 2020 acquisition of the remaining interest in HBO Latin America Group and higher domestic HBO Max direct-to-consumer subscribers, partially offset by content and other revenues declines due to lower home entertainment and licensing.

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