AT&T Q1 Preview: HBO Max Comes Into Focus

&T Q1 Preview: HBO Max Comes
Cheyne Gateley/VIP

There’s a really low bar for AT&T when it reports Q1 results before market open on April 22. Wall Street analysts expect earnings and revenue to have stayed relatively unchanged during the quarter, so any better-than-expected results will likely push AT&T’s stock higher. 

Compared with its peers, AT&T stock has struggled to see meaningful gains for a year. Over the past 12 months, AT&T shares fell more than 3%, while Comcast rose 45%, Disney jumped 78%, and Netflix was up 25%.  

Much of the anticipated stagnation in earnings for AT&T is due to the increased investments in streaming service HBO Max. It has been one full quarter since WarnerMedia’s bold decision to put its entire 2021 Warner Bros. movie slate simultaneously on HBO Max and in theaters. According to TVision data provided exclusively to VIP, Warner Bros.’ “Godzilla vs. Kong” likely drew a record number of consumers to HBO Max in April. Thursday, investors will get their first update on how that movie strategy is playing out for the company.  

HBO and HBO Max had 41.5 million domestic subscribers at the end of the fourth quarter, and in January the company updated its forecast and now expects between 120 million and 150 million global subscribers for HBO Max and HBO by the end of 2025. 

Even though entertainment remains a small portion of overall revenue for AT&T, it will continue to be in focus for investors as the media industry moves aggressively toward streaming and direct-to-consumer. Due to its loyal fan base, HBO Max is largely expected to remain a big player in the streaming wars, but it’ll have to prove to investors that it’s able to stay relevant and compete with heavyweights Netflix and Disney+. 

This is part of a series of Variety Intelligence Platform’s Q1 2021 earnings previews for the biggest tech and media companies. For a complete list of the companies VIP has analyzed in advance of the Q1 earnings season, read our most recently published special report, “Q1 Preview: 2021 Financial Outlook for Key Media & Tech Companies.” 

Read the full special report