AT&T profits rise as wireless, HBO Max subscribers flock in

AT&T again saw wireless customers return to the service amid aggressive promotions -- particularly for the iPhone 13 -- as overall profits surged in the third quarter. 

The company posted a net gain of 928,000 postpaid phone customers, or people with higher credit scores who pay their bills at the end of the month, which it said was the highest level in more than 10 years. AT&T was among the carriers that offered a free iPhone 13, 13 Pro or 13 Mini with an eligible trade-in.

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On the media side, AT&T said its global subscriber base of HBO and HBO Max subscribers was 69.4 million, up 12.5 million over a year ago, and 1.9 million over the previous quarter. Domestically, its base grew to 45.2 million from 38 million a year ago. 

The upward trajectory puts AT&T in a good position to finish the year strong, thanks in part to the continued promotions and the company's decision to release its top-tier films like Dune and The Matrix Resurrections on HBO Max at the same time as in theaters, a move that has angered both Hollywood talent and the theater industry. 

The impact of the iPhone 13 launch was minimal in the third quarter -- Apple launched the device on Sept. 24, at the tail end of the period. The promotions should drive further growth in the fourth quarter, although rivals Verizon and T-Mobile put out their own offers as well. 

Verizon posted its own third-quarter results on Wednesday, noting it added 275,000 net new postpaid phone users. 

Overall, AT&T posted a net profit of $5.92 billion, or 82 cents a share, compared with a year-earlier gain of $2.82 billion, or 39 cents a share. Excluding one-time gains and losses, AT&T's adjusted earnings rose to 87 cents a share from 76 cents a share a year ago. 

Revenue excluding its divested US video business, meanwhile, rose 4.7% to $38.1 million, although total revenue fell 5.7% to $39.9 billion. 

Analysts, on average, forecast earnings of 78 cents on revenue of $39.14 billion. 

"We continue to execute well in growing customer relationships, and we're on track to meet our guidance for the year," AT&T CEO John Stankey said in a press release.

AT&T says it expects full-year adjusted earnings to be at the high end of its guidance of low- to mid-single digit growth. It also expects its HBO and HBO Max global subscriber base to reach the higher end of its guidance of 70 million to 73 million. 

AT&T shares rose 1.5% to $26.29 in premarket trading.