AT&T Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
Adjusted EPS  Beat $0.86 $0.78
Revenue Beat $43.9B $42.3B
Additional Postpaid Phone Subscribers Beat 595.0K 248.1K

Source: Predictions based on analysts' consensus from Visible Alpha

Key Takeaways

  • Additional postpaid phone subscribers were more than double the amount forecast by analysts.
  • Postpaid phone subscriptions are a key area of growth amid declines in some of AT&T's other legacy businesses.
  • AT&T posted 2.7 million total domestic HBO Max and HBO subscriber net adds.

AT&T (T) Financial Results: Analysis

AT&T Inc. (T) reported Q1 FY 2021 earnings that beat analyst expectations. Revenue was also higher than forecast. Additional postpaid phone subscribers, which AT&T refers to as "postpaid phone net additions," came in at 595,000, more than double analyst estimates. It was the strongest first quarter for net adds in at least five years. The company's shares were up more than 1% in pre-market trading. Over the past year, AT&T's shares have provided a total return of 8.1%, well below the S&P 500's total return of 52.5%.

AT&T (T) Additional Postpaid Phone Subscribers

Additional postpaid phone subscribers represent a key metric indicating the net difference between the number of new postpaid phone subscriptions added during the quarter and the number of subscriptions that were terminated. As long as this metric is positive, it means that AT&T is adding to the total number of postpaid phone subscriptions. Adding new phone subscriptions has become increasingly important recently as some of the company's other legacy businesses decline.

AT&T was able to garner new postpaid phone subscribers even as at least one competitor lost some during the quarter. Rival Verizon Communications, Inc. (VZ) recently reported a net loss of 178,000 postpaid phone connections over the period.

"We continued to excel in growing customer relationships in our market focus areas of mobility, fiber, and HBO Max," said CEO John Stankey. "We had another strong quarter of postpaid phone net adds, higher gross adds, lower churn, and good growth in Mobility EBITDA." AT&T posted 2.7 million total domestic HBO Max and HBO subscriber net adds, bringing total domestic subscribers to 44.2 million. The HBO Max business has become especially important amid the secular shift in consumer preferences from traditional satellite and cable TV toward digital streaming.

AT&T offered some guidance for the rest of FY 2021. The company believes that adjusted EPS will remain stable compared to FY 2020 and that consolidated revenue will grow approximately 1% on a comparative basis.

AT&T's next earnings report (Q2 FY 2021) is estimated to be released on July 21, 2021.