Since the beginning of the year, AT&T shares have fallen by 6%. This happens under the condition of good forecasts from the management for the next few years, in which, apparently, market participants do not really believe. Here it is worth considering the fact that in recent years the company has suffered due to large-scale M&A deals with DirecTV and Time Warner. They not only distracted managers from the process of managing the main business, but also complicated the financial assessment of the issuer, since it became much more difficult to compare financial results with previous periods.
It can be noted that DirecTV has a negative impact on financial results. While the rest of the divisions recovered from the pandemic: total revenue increased by 7.6% yoy, to $44 billion, while DirecTV's revenue decreased from $7.4 billion last year to $6.6 billion in the second quarter of 2021. AT the same time, AT&T's revenue is still below the pre-coronavirus values: in the fourth quarter of 2019, the figure was $46.8 billion.
AT&T reports simply do not show any signs of strong growth in the near future. HBO Max will lose 5 million users who have subscribed to the service through Amazon. The company decided to do without intermediary services and will now encourage people to subscribe directly. Firstly, such a large reduction in subscribers will definitely affect the results. Secondly, the management plans to attract people with a 50% discount for the first six months of the subscription. In general, this strategy has a chance of success and can increase revenues, but in the medium term it is clearly impossible to do without financial pain.