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AT&T beats earnings thanks to strong wireless, home internet, HBO Max growth

The fourth quarter was a good one for AT&T.

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AT&T had a good holiday quarter. 

Angela Lang/CNET

Despite the unpredictability of COVID-19, AT&T's 2020 ended up working out. In its fourth-quarter earnings released on Wednesday, AT&T announced that it saw growth in wireless users, fiber customers and HBO Max activations. 

The company reported revenues of $45.7 billion for the quarter, beating the $44.55 billion expected by analysts polled by Yahoo Finance. Adjusted earnings per share, which factors in COVID-19 related impacts including the loss of theatrical revenue and lack of wireless roaming charges, was $0.75. Analysts were expecting $0.73. 

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For the wireless group, AT&T announced that it had 800,000 postpaid phone net additions. Postpaid users, who pay their phone bills at the end of the month, are valued more highly by the investment community as a key metric of a carrier's success. For 2020 the company said it had 1.5 million phone net adds, its highest annual total since 2011. 

AT&T's aggressive deals for new devices like the iPhone 12 also seemed to have worked keeping customers on its service. The carrier said that its churn, which tracks the people leaving the network, was among the lowest it has seen in the fourth quarter at 0.76%. 

The telecom giant continued to see growth in home broadband, with 273,000 net additions in the fourth quarter for its fiber internet offering. Television, which includes the DirecTV satellite business and its AT&T TV streaming service, continued to struggle as people cut the cord and saw a net loss of 617,000 users. 

Revenue for its WarnerMedia business dropped 9.5% to $8.5 billion in the quarter because of disruptions caused by COVID-19, though the group's HBO Max streaming service continued to see growth and reached 17.2 million new activations for the year. AT&T has been betting big on HBO Max and announced last year that it will release all of its 2021 Warner Bros. theatrical films simultaneously on the streaming service because of the pandemic. The first of these films, Wonder Woman 1984, debuted on the service on Christmas Day. 

With the new activations, the company now has over 41 million US subscribers for HBO Max and HBO and a total of nearly 61 million HBO subscribers worldwide. During its earnings call, AT&T reiterated that an advertising-supported version of HBO Max will be coming in the second quarter of the year. It also plans to expand HBO Max to other countries in 2021.