Last year, AT&T bought Warner Communications to add content to its properties and analysts were looking for the future. In the Wall Street Journal article by Drew FitzGerald and Kimberly Chin, AT&T lost 544,000 premium TV customers or those who no longer pay for cable TV. Chief Executive Randall Stephenson said we continue to see declines in traditional TV subs, particularly those area where we cannot bundle with broadband. Hopefully they will lesson as we get through 2020.
The unit that hold the customer defections operating income increase 4.8% to $1.48 billion by gaining 45,000 broadband customers and by keeping a tighter lid on expenses.
Wireless operating income improved and it added 80,000 more postpaid phone subscribers, a valuable category because they tend to more loyal and renew their subscriptions. Even though there is new crop of smartphones, customers are tending to hold onto their phones longer.
Overall AT&T’s net income was $4.01 billion or 56 cents a share, down from $4.66 billion or 75 cents a share. Warner Media added $1.2 billion in operating income.
Linking to dividend paying stocks, Netflix and Disney’s new streaming service is the expected route Warner Media. Just because it is big company, does not mean they will do it well, similar to most companies it is about the execution – how well do they match customer expectation to reality.
There are more questions than answer, till the next time – to raising questions.