AT&T Closes Book On WarnerMedia Ownership Era; Stock Plunges After Q2 Report Lowering Cash-Flow Guidance
21.07.2022 - 17:19
/ deadline.com
AT&T reported solid results for its final quarter of full ownership of WarnerMedia, but its stock plunged after the company lowered its outlook for full-year free cash flow.
Excluding items, AT&T posted earnings per share of 65 cents in the quarter ending June 30, beating Wall Street analysts’ consensus estimate of 61 cents. Revenue matched the Street view at $29.6 billion, up 2% from a year ago when DirecTV and WarnerMedia are not counted in the 2021 quarter.
Shares in AT&T fell 10% to $18.43 at the start of the trading day, slipping below their level just after the April 8 close of the WarnerMedia deal. In that $43 billion transaction, the telecom giant spun off WarnerMedia into a new entity, Warner Bros Discovery, retaining a 71% stake. Last August, AT%T spun off pay-TV operator DirecTV into another new entity, with private equity firm TPG taking a 30% stake.
The company added 813,000 net new monthly bill paying wireless phone subscribers in the quarter, as well as 316,000 new broadband customers.
AT&T lowered its full-year free cash flow guidance to a $14 billion range from a $16 billion range. The company cited “heavy investment in growth” as well as “working capital impacts related to timing of collections.”
In a conference call with analysts, CEO John Stankey and CFO Pascal Desroches did not dwell on the WarnerMedia days, but Stankey did emphasize his belief in moving to a stand-alone future. “We made some hard moves that brought us to this moment,” he acknowledged.
Analysts largely did not focus on the entertainment business, but one asked about the decision last month to cancel a bundle offering HBO Max to top-end wireless subscribers. “Entertainment as part of a wireless bundle is probably something that’s going to