AT&T takes $15.5 billion charge on DirecTV, adds more phone customers

AT&T Inc said on Wednesday it wrote down its premium TV business, which includes satellite television unit DirecTV, by $15.5 billion, reflecting the impact of years of cord-cutting in the industry as viewers move to cheaper online streaming services.
 

The fourth-quarter writedown comes as sources have told Reuters AT&T has entered into exclusive talks to sell a minority stake in DirecTV to private equity firm TPG in a deal seen valuing the division at above $15 billion.
 

AT&T purchased DirecTV for $68 billion including debt in 2015.
 

The writedowns taken by AT&T, which further included $780 million from its WarnerMedia business because of pandemic-related production and cinema shutdowns last year, partially eclipsed good news from the company's core wireless business, which added almost twice as many phone subscribers than Wall Street had expected.
 

During the fourth quarter, AT&T added 800,000 net new phone subscribers who pay a monthly bill, beating analyst expectations of 475,300 customers, according to research firm FactSet.
 

The growth was helped by the launch of the new 5G iPhone during the quarter.
 

Shares of AT&T were down 2.8% to $28.91 in pre-market trading.
 

Excluding asset impairment, benefits and merger-related costs, AT&T earned 75 cents per share, surpassing analyst estimates of 73 cents, according to Refinitiv data.
 

WarnerMedia, the unit that includes HBO Max, posted revenue of $8.6 billion, down from $9.5 billion in the year-ago quarter.
 

AT&T reported 41.5 million U.S. subscribers for both its premium TV channel HBO and streaming service HBO Max in the fourth quarter, up from 38 million the previous quarter.
 

Total operating revenue was $45.69 billion, beating analysts' estimates of $44.56 billion, according to IBES data from Refinitiv.

AT&T suffered a net loss during the quarter of $13.88 billion, or $1.95 per share.