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Will Solid WarnerMedia Revenues Buoy AT&T (T) Q1 Earnings?
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AT&T Inc. (T - Free Report) is scheduled to report first-quarter 2022 results, before the opening bell, on Apr 21. In the first quarter, the company is likely to have recorded higher revenues year over year from the WarnerMedia segment due to significant traction from the streaming platform of HBO Max.
Factors at Play
The WarnerMedia segment represents the various business units of the erstwhile Time Warner, namely, Turner, Home Box Office and Warner Bros. It also includes AT&T’s Regional Sports Networks in the Turner division and Otter Media.
The company witnessed healthy traction in HBO Max with a steady increase in subscriber base during most of the quarter, buoyed by various subscription options and unrivaled access to global fan-favorite programs. In the first quarter, HBO Max was launched in 15 countries to take its tally to 61 nations worldwide. These are likely to have positively impacted its first-quarter performance.
With higher customer adoption, the segment revenues are likely to have increased during the quarter. Moreover, HBO Max boasts a higher-than-average price of $15 a month and is, therefore, reportedly making more money than some of its streaming rivals. This is likely to have driven the revenue growth in the WarnerMedia segment.
In addition, with live sports and events returning to pre-pandemic levels, TV advertisers have largely returned to the fold. Intermittent movie releases and series for both traditional TV and streaming services are also expected to have buoyed top-line growth. However, adverse foreign currency translations, evolving market conditions and continued investments in HBO Max for new content production, foregone licensing revenues and platform costs are likely to have led to soft margins.
Overall Expectations
The Zacks Consensus Estimate for revenues from WarnerMedia is pegged at $9,115 million, indicating an improvement from $8,526 million reported in the year-ago quarter. Operating income is pegged at $1,452 million, implying a decline from $1,960 million reported in the prior-year quarter. The consensus mark for EBITDA from the segment stands at $1,644 million, suggesting a fall from $2,123 million.
The Zacks Consensus Estimate for total revenues of the company stands at $38,304 million, indicating a decline from $43,939 million reported in the prior-year quarter. The consensus mark for earnings is currently pegged at 78 cents per share. It had reported earnings of 86 cents per share in the year-earlier quarter.
Earnings Whispers
Our proven model does not predict an earnings beat for AT&T for the first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -2.39%, with the former pegged at 76 cents and the latter at 78 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Microsoft Corporation (MSFT - Free Report) is set to release quarterly numbers on Apr 26. It has an Earnings ESP of +0.03% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Nokia Corporation (NOK - Free Report) is +28.57% and it carries a Zacks Rank of 2. The company is set to report quarterly numbers on Apr 28.
The Earnings ESP for Apple Inc. (AAPL - Free Report) is +1.78% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Apr 28.
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Will Solid WarnerMedia Revenues Buoy AT&T (T) Q1 Earnings?
AT&T Inc. (T - Free Report) is scheduled to report first-quarter 2022 results, before the opening bell, on Apr 21. In the first quarter, the company is likely to have recorded higher revenues year over year from the WarnerMedia segment due to significant traction from the streaming platform of HBO Max.
Factors at Play
The WarnerMedia segment represents the various business units of the erstwhile Time Warner, namely, Turner, Home Box Office and Warner Bros. It also includes AT&T’s Regional Sports Networks in the Turner division and Otter Media.
The company witnessed healthy traction in HBO Max with a steady increase in subscriber base during most of the quarter, buoyed by various subscription options and unrivaled access to global fan-favorite programs. In the first quarter, HBO Max was launched in 15 countries to take its tally to 61 nations worldwide. These are likely to have positively impacted its first-quarter performance.
With higher customer adoption, the segment revenues are likely to have increased during the quarter. Moreover, HBO Max boasts a higher-than-average price of $15 a month and is, therefore, reportedly making more money than some of its streaming rivals. This is likely to have driven the revenue growth in the WarnerMedia segment.
In addition, with live sports and events returning to pre-pandemic levels, TV advertisers have largely returned to the fold. Intermittent movie releases and series for both traditional TV and streaming services are also expected to have buoyed top-line growth. However, adverse foreign currency translations, evolving market conditions and continued investments in HBO Max for new content production, foregone licensing revenues and platform costs are likely to have led to soft margins.
Overall Expectations
The Zacks Consensus Estimate for revenues from WarnerMedia is pegged at $9,115 million, indicating an improvement from $8,526 million reported in the year-ago quarter. Operating income is pegged at $1,452 million, implying a decline from $1,960 million reported in the prior-year quarter. The consensus mark for EBITDA from the segment stands at $1,644 million, suggesting a fall from $2,123 million.
The Zacks Consensus Estimate for total revenues of the company stands at $38,304 million, indicating a decline from $43,939 million reported in the prior-year quarter. The consensus mark for earnings is currently pegged at 78 cents per share. It had reported earnings of 86 cents per share in the year-earlier quarter.
Earnings Whispers
Our proven model does not predict an earnings beat for AT&T for the first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -2.39%, with the former pegged at 76 cents and the latter at 78 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
AT&T Inc. Price and EPS Surprise
AT&T Inc. price-eps-surprise | AT&T Inc. Quote
Zacks Rank: AT&T has a Zacks Rank #3.
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Microsoft Corporation (MSFT - Free Report) is set to release quarterly numbers on Apr 26. It has an Earnings ESP of +0.03% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Nokia Corporation (NOK - Free Report) is +28.57% and it carries a Zacks Rank of 2. The company is set to report quarterly numbers on Apr 28.
The Earnings ESP for Apple Inc. (AAPL - Free Report) is +1.78% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Apr 28.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.