AT&T maintained earnings guidance for the year after an opening quarter in which its Mobility and WarnerMedia units proved highlights.
On an earnings call, the US operator credited higher equipment sales for a rise in revenue at its Mobility unit, up 9.4 per cent year-on-year to $19 billion, while subscription growth fuelled by its HBO and HBO Max services contributed to a 9.8 per cent increase for WarnerMedia to $8.5 billion.
AT&T highlighted ongoing efforts to reduce its debt levels, with management stating it would continue to shed select assets as part of its strategy.
Net income grew from $4.6 billion in Q1 2020 to $7.5 billion in the recent period, with overall revenue growing 2.7 per cent to $43.9 billion. Free cash flow of $5.9 billion was 51 per cent higher, with 63.5 per cent of the sum used to pay shareholder dividends.
During the call, CEO John Stankey discussed AT&T’s plans to differentiate in the home broadband market by focusing on customer equipment and services.
Quizzed by Colby Synesael, MD and senior research analyst at Cowen Research, about AT&T’s ongoing growth in broadband internet subscribers, Stankey said it had begun thinking “beyond the side of the house”.
“The inside of the house is a bit of a dirty place right now from a data perspective and it’s getting dirtier by the day”, Stankey said, referring to the growing number of connected devices competing for bandwidth in many homes.
He said AT&T used to “wipe our hands of the problem that occurred on the other side of the network interface”, but now wants to find ways to improve network performance for the end user. “We think that that’s a great way to compete moving forward”.