By Tali Arbel, AP Technology Writer
The coronavirus sapped $2.8 billion in revenue from AT&T in its most recent quarter, mostly in its WarnerMedia TV and film division. Its satellite TV business, DirecTV, continued to bleed customers.
"I expect we're going to be dealing with some of these economic challenges in the COVID environment as we move forward here," said AT&T CEO John Stankey said during a call with analysts Thursday.
WarnerMedia revenue fell 23% to $6.8 billion due to a pullback by TV advertisers, particularly as there were no live sports, and movie theaters closed.
Hollywood shut down production due to the pandemic, delaying movie releases and series for both traditional TV and streaming services. Stankey said the company hopes to resume film and TV production next month.
The company is hoping to navigate the shift to online video with its HBO Max service, which launched in late May. AT&T said it had 3 million people sign up with the $15-a-month service one month after it launched, while 4 million "activated" their Max account — it's included free for certain AT&T customers and cable subscribers who already pay for HBO.
There are 36.3 million U.S. subscribers to HBO Max or HBO. The company said it had "work to do to educate and motivate" HBO customers that they could switch to HBO Max, which has more content.
HBO "has gotten off to a rather inauspicious start," wrote MoffettNathanson analyst Craig Moffett in a note to investors.
In the wireless business, AT&T's biggest, revenues were relatively steady, slipping 1% to $17.15 billion. It lost 151,000 customers who pay a monthly cellphone bill. That number included 340,000 people that AT&T kept providing service to even though they had stopped paying because of economic difficulties due to the pandemic as part of the "Keep America Connected Pledge" many telecom companies made to the Federal Communications Commission. That agreement with the FCC ended on June 30. CFO John Stephens said the company is contacting those customers and wants to try to keep them, but didn't specify how the pricing would work. AT&T said it also had 159,000 home internet customers who weren't paying because of the pandemic.
Tens of millions of people in the U.S. can't get broadband or can't afford it, and that has only grown more difficult for them during the pandemic as work, school and social interaction have shifted online.
The company added 135,000 customers to prepaid phone service, which tends to be cheaper.
AT&T Inc. also lost 886,000 customers in its "premium" TV division, which is mostly DirecTV subscribers. That video base has shrunk by a quarter in two years.
Overall, the Dallas company's quarterly profit fell 65% to $1.28 billion, or 17 cents per share.
Adjusted for asset impairment costs and other items, earnings came to 83 cents per share. Wall Street expected per-share earnings of 78 cents, according to a survey by Zacks Investment Research.
Revenue fell 9% to $40.95 billion, just shy of expectations.
AT&T shares fell less than 1% to $29.91 Thursday.
Harvey Weinstein hit with new sex crime charge in New York
Harvey Weinstein pleaded not guilty Wednesday to a new sex crime charge in New York, as he awaits retrial in his landmark #MeToo case.
Details of the new allegations were not immediately available. He was charged with committing a criminal sex act.
The jailed ex-movie mogul has long maintained that any sexual activity was consensual.
Prosecutors revealed last week that Weinstein had been indicted on additional sex crime charges that weren't part of the case that led to his now-overturned 2020 conviction. But the new indictment was sealed until his arraignment.
Prosecutors have said that the grand jury heard evidence of up to three alleged assaults — two in hotels in the Tribeca neighborhood and one at a lower Manhattan residential building. The purported incidents took place from the mid-2000s to 2016, prosecutors said.
But it's not clear whether any of those allegations underlie the new indictment.
While bracing for the new charges, Weinstein also is awaiting retrial after New York state's highest court this spring overturned his 2020 conviction on rape and sexual assault charges involving two women. The high court, called the Court of Appeals, ordered a new trial, which is tentatively scheduled to begin Nov. 12.
The Court of Appeals ruled that the then-trial judge unfairly allowed testimony against him based on allegations that were not part of the case. That judge's term expired in 2022, and he is no longer on the bench.
Prosecutors have said they'll seek to fold the new charges into the retrial, but Weinstein's lawyers say it should be a separate case.
Weinstein, who also was convicted in 2022 in a Los Angeles rape case, remains behind bars while awaiting his New York retrial.
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