AT&T loses monthly subscribers as media unit takes a hit from COVID-19

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Shares of the company were up about 1% in trading before the bell.

The media and telecommunications company, which launched streaming service HBO Max in May, reported 36 million subscribers for both “HBO Max/HBO”. In the first quarter, HBO had about 33 million customers.

In the second quarter, AT&T lost 151,000 postpaid mobile phone subscribers, which included the loss of 338,000 customers who stopped paying but were kept on the network as part of a federal program to keep Americans connected to wireless networks during the pandemic.

Analysts had expected the company to add 6,800 subscribers, according to research firm FactSet.

AT&T’s WarnerMedia segment has been reeling under production delays and had to postpone the release of Christopher Nolan’s highly-anticipated “Tenet” thrice as theater chains remained largely shut. Revenue in the unit fell 22.7% to $6.8 billion.

The company lost 886,000 premium TV subscribers which includes satellite TV provider DirecTV and a smaller number of U-Verse customers.

Excluding items, AT&T earned 83 cents per share, above analysts’ estimates of 79 cents per share.

The company said it expects dividend payout ratio at the end of 2020 to be in the 60%s range and is aiming for the lower end of that range.

Total quarterly revenue fell nearly 9% to $41 billion. Analysts on average had expected $41.10 billion, according to IBES data from Refinitiv.