AT&T takes a hit to quarterly revenue due to Coronavirus

AT&T Inc. (NYSE: T) revealed a massive increase in monthly phone subscribers on Wednesday but recorded weaker than expected earnings and revenue in the first quarter as Coronavirus weighed on its performance.

According to the Dallas-headquartered media and telecommunications company, its earnings declined by 4 pence per share in the recent quarter due to the ongoing health crisis. It also recorded its Q1 advertising sales roughly £486 million lower attributed primarily to the decrease in wireless equipment sales and the delay of live sports including March Madness.

The U.S telecoms giant also withdrew its financial guidance for 2020 citing the rising uncertainty ascribed to the Coronavirus pandemic. Nonetheless, the company added, its free cash flow is sufficient to make payments for debt and dividends.

AT&T Closed 40% Of Its Retail Stores Due To COVID-19

From January to the end of March, AT&T expanded its net monthly phone subscribers by 163,000 new users as compared to Wall Street’s average estimate of 90,700. In an attempt to minimize the fast transmission of the flu-like virus and to protect its employees against the health hazard, AT&T temporarily closed over 40% of its countrywide retail stores but the customer base still expanded in the recent quarter.

AT&T also accentuated in its report on Wednesday that COVID-19 has so far cast a £352 million hit to EBITDA.

In terms of premium TV subscribers, AT&T’s userbase contracted by 897,000 in the first quarter. Such subscribers include users of U-Verse and DirecTV (satellite TV provider).

AT&T’s mass media subsidiary, WarnerMedia was also reported under pressure due to the health emergency as it recorded £5.99 billion in quarterly revenue versus £6.80 billion that it reported in the same quarter last year.

AT&T’s Q1 Financial Results Versus Analysts’ Estimates

According to Refinitiv, experts had forecast the company to print £35.79 billion in total revenue in the first quarter. In terms of earnings per share (EPS), their estimate was capped at 69 pence per share. AT&T, however, missed the estimates posting £34.66 billion in revenue in Q1 and 68 pence of earnings per share.

Ahead of the earnings report, AT&T was reported 1% up in extended trading on Tuesday. At £24 per share, it is currently around 20% down year to date in the stock market. In 2019, on the contrary, the company had recorded an annual gain of 30%.

AT&T is currently valued at £173.50 billion and has a price to earnings ratio of 15.77.