AT&T reported better-than-expected second quarter earnings due to 5G demand and customers upgrading their smartphones.
The company also raised its outlook for 2021 after it added 789,000 net new postpaid phone subscribers, well ahead of estimates. AT&T's report landed a day after Verizon reported strong results due as revenue from selling devices surged amid a 5G upgrade cycle.
AT&T reported earnings of 21 cents a share on revenue of $44 billion, up 7.6% from a year ago. Adjusted non-GAAP earnings were 89 cents a share.
Wall Street was looking for AT&T to report second quarter non-GAAP earnings of 79 cents a share on revenue $42.66 billion.
AT&T also saw a strong quarter from HBO Max. AT&T is now forecasting HBO Max to end the year with 70 million to 73 million subscribers.
Going forward AT&T is focusing on its wireless and broadband businesses as it plans to combine WarnerMedia with Discovery.
AT&T said it added 789,000 postpaid phone net additions and 1,156,000 postpaid net adds across devices. AT&T's mobility unit delivered operating income of $6 billion. Like Verizon, AT&T is seeing a pop from equipment revenue.
Jeffery McElfresh, CEO of AT&T Communications, said:
We've been able to achieve and sustain taking share in multiple segments. It's across the board. It's not in any one particular segment. We're growing in consumer. We're growing in small business. We're growing with our FirstNet position. We're growing in enterprise.
On the broadband front, AT&T said it added 246,000 AT&T Fiber net additions with broadband revenue up 8.3%.
As for the outlook, AT&T said revenue growth for 2021 will be in the 2% to 3% range with adjusted earnings to grow in the low- to mid-single digit range. AT&T is also about to close a divestiture of DirecTV and that will cut 2021 revenue by $9 billion and EBITDA by $1 billion. The DirecTV sale will generate cash by about $7.8 billion.
By the numbers for the second quarter: