US Telecom Companies Also Show COVID-19 Impact... AT&T's Q1 Revenue Drops 4.6%

[Asia Economy Reporter Seulgina Jo] The first-quarter (January to March) revenue of US telecommunications company AT&T fell by nearly 5% due to the impact of the novel coronavirus disease (COVID-19). While the core business of mobile phones remained strong, the media segment including TV took a direct hit. AT&T also withdrew its 2020 performance forecast, which was presented at the end of last year, citing economic uncertainty.

According to local US media on the 22nd (local time), AT&T announced first-quarter revenue of $42.78 billion, down 4.6% from the previous year. Earnings per share rose to $0.63, meeting market expectations. AT&T is the second-largest mobile carrier in the US and owns CNN, HBO, and Warner Bros. Studios.

The impact on the core mobile phone business was minimal. Although device sales declined due to store closures from social distancing measures, overall revenue in the mobile segment remained similar to the same period last year. The number of wireless subscribers increased by 163,000, and operating profit margin even improved.

On the other hand, the media segment including TV was hit hard. The consecutive cancellation of sports events negatively affected advertising sales. The number of paid premium TV subscribers such as DirecTV decreased by 897,000, and streaming subscribers for AT&T TV Now dropped by 138,000. Home internet subscribers also declined by 73,000.

Local media added that this contrasts with the benefits online video streaming companies have been receiving since the spread of COVID-19. CNN, TBS, and other WarnerMedia revenues fell sharply by 12.2% due to a significant drop in other advertising.

In particular, if the impact of COVID-19 prolongs, even the still-strong mobile telecommunications segment is expected to face damage. Local media anticipate that in the long term, demand for device replacements will sharply decline.

Randall Stephenson, AT&T’s Chief Executive Officer (CEO), said, "It is difficult to accurately predict the COVID-19 pandemic and its resulting economic impact," and withdrew the 2020 performance forecast. The company explained that even the outlook for the second quarter (April to June) is uncertain. AT&T did not mention specific figures related to the performance forecast.

However, CEO Stephenson emphasized that AT&T’s cash liquidity is sufficient. He added that investments in next-generation wireless, the HBO Max streaming service launching next month, and broadband communications will continue. AT&T’s stock price on the New York Stock Exchange has fallen 24% since the beginning of the year, far exceeding the overall decline of the S&P 500 index.

This content was produced with the assistance of AI translation services.