AT&T Inc. said its core telecommunications profits are growing even as its Hollywood footprint is about to shrink, underscoring its decision to leave the entertainment business over the coming year.
The media and telecommunications giant said it is focusing on continuing to expand its broadband business and cellphone subscriber base while moving away from satellite-TV and media production. Ahead of that retreat, the company raised its full-year financial projections. The company now expects consolidated revenue growth between 2% and 3%, up from a prior target of about 1% growth.
AT&T in May decided to spin off its media brands—including HBO, CNN, TNT, TBS and the Warner Bros. studio—into a new publicly-traded company with Discovery Inc. The move followed a February deal to spin off a 30% stake in AT&T’s pay-TV unit while giving up operational control of the business, which will be called DirecTV upon closing.
“We want to hit a strong exit velocity with both of these businesses, at which point the combination with the right partner only expands to respective opportunities for success,” Chief Executive John Stankey said during a call with analysts.
AT&T also put much of its digital advertising business, known as Xandr, on the market in 2020. The company said Wednesday it will sell its remaining satellite-TV operations in Latin America, called Vrio, to Argentina’s Grupo Werthein. The deal, slated to close in 2022, was expected to trigger a $4.6 billion accounting charge for AT&T.