|Day's Range||4.6500 - 4.6500|
(Bloomberg) -- AT&T Inc., looking for ways to pay down debt after the $85 billion takeover of Time Warner Inc. last year, is considering the sale of its Puerto Rican operations, according to a person familiar with the situation.The business could fetch about $3 billion, said the person, who asked not to be identified because the matter is private. The potential sale was reported earlier Thursday by Reuters.The telecom giant has been looking to strengthen its balance sheet after the Time Warner purchase turned it into a sprawling media conglomerate. It previously agreed to sell its stake in Hulu and its New York offices -- deals that generated about $3.6 billion.It’s also weighing a sale of its regional sports networks, part of a plan to cut as much as $8 billion in debt by the end of the year, people with knowledge of the matter said earlier this month. The four regional networks, which includes rights to teams such as the hockey’s Pittsburgh Penguins, basketball’s Houston Rockets and baseball’s Seattle Mariners, could fetch close to $1 billion, the people said.Chief Executive Officer Randall Stephenson has said the company’s top priority this year is to reduce debt. Investors have generally been supportive of the efforts. The shares are up 16% this year, outpacing the 1.8% gain of top rival Verizon Communications Inc.(Updates with other deals starting in third paragraph)To contact the reporter on this story: Scott Moritz in New York at email@example.comTo contact the editor responsible for this story: Nick Turner at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Software leader Microsoft late Thursday trounced Wall Street's earnings target on roughly in-line sales for its fiscal fourth quarter. The Microsoft earnings news pushed its stock higher.
The sale process comes as AT&T, the second-largest U.S. wireless carrier, seeks to cut the debt pile it took on to purchase Time Warner Inc for $85 billion last year. AT&T has hired a financial adviser to manage the sale process, the sources said, cautioning that it is possible no deal will materialise. AT&T's business in Puerto Rico comprises internet, TV, landlines and business services.
AT&T Inc is exploring options for its business in Puerto Rico that could include a potential sale for around $3 billion, people familiar with the matter said on Thursday. The sale process comes as AT&T, the second-largest U.S. wireless carrier, seeks to cut the debt pile it took on to purchase Time Warner Inc for $85 billion last year. AT&T has hired a financial adviser to manage the sale process, the sources said, cautioning that it is possible no deal will materialize.
At 2:31 PM ET on Thursday, T-Mobile was trading at $77.67 with a 1.6% loss for the day, while Sprint was trading at $6.89 with a 2.8% loss.
(Bloomberg) -- Netflix Inc. shocked investors by reporting a drop in U.S. customers and much slower growth overseas, raising fears that the streaming giant is losing momentum just as competitors prepare to pounce.The shares plunged 10% to $325.21 at the close in New York, the worst one-day drop in three years, after the company reported a loss of 130,000 customers in the U.S. Netflix blamed higher prices and a weak slate of TV shows. It signed up 2.8 million subscribers internationally in the period, roughly half what the company predicted.“Netflix has a difficult road ahead, with looming competition and the removal of popular content,” said EMarketer Inc. analyst Eric Haggstrom. But a stronger lineup of new shows in the current quarter could help attract former subscribers, he said.The quarter represents the biggest black eye for Netflix since 2011, when the company split its DVD-by-mail business from its streaming business. That move raised prices for its customers, and resulted in the loss of more than 800,000 subscribers in the U.S. The company had planned to call the DVD service Qwikster, but it backpedaled on the plan after investors and customers scoffed at the idea.Netflix said the miss is a one-time blip rather than a long-term problem. The second quarter has typically been its weakest time of year: The company missed its forecast during the period in three of the past four years.Netflix looks to add 7 million subscribers in the current quarter, thanks in part to the return of top shows “Stranger Things” and “Orange Is the New Black.”“Our position is excellent,” Chief Executive Officer Reed Hastings said during a videoconference call Wednesday. “We’re building amazing capacity for content. Our product has never been in better shape.”Several analysts agreed that the second-quarter disappointment should be only a temporary hiccup for Netflix. Investors should “aggressively buy the stock” on weakness, especially below $325 a share, Loop Capital said.Heavy SpendingFor now, the second-quarter shortfall is renewing investor concern about the company’s heavy program spending and low profitability. Netflix shelled out more than $3 billion on programming in the quarter and another $600 million to market its shows. The company spent $594 million more than it took in and will need to raise money to fund programming.Investors had been forgiving about the spending and the debt -- so long as customers grew at record rates. But the loss of subscribers in the U.S. was the first since the Qwikster debacle, and it suggests Netflix may be running into price resistance or the limits of the addressable domestic market. The company has forecast it can reach as much as 90 million customers in the U.S., compared with 60.1 million currently.Overseas SlowdownInternational results flagged too, with the company missing its own forecast of 4.7 million new subscribers. Europe, Latin America and Asia have been the primary drivers of Netflix’s customer acquisition in recent years, and growth must be sustained if the company is to justify its high valuation.Netflix is introducing a cheaper, mobile-only package in India to attract customers in a big market with price-sensitive customers.Analysts expect the company to have a blockbuster second half because of a heavy release schedule that includes a new season of “The Crown” and movies by directors Martin Scorsese and Michael Bay. Even after the slowdown last quarter, Netflix still thinks it can have its best year of customer growth in 2019.But competition is coming. Walt Disney Co. and Apple Inc. plan to introduce streaming services this year, while offerings from Comcast Corp. and AT&T Inc. arrive in 2020. Those services may not steal users from Netflix, but they will make future growth harder, according to Michael Pachter, an analyst with Wedbush Securities.Just a Preview?“We saw a preview of next year with this quarter,” Pachter said in an interview with Bloomberg Television. “Next year, they’ll have a couple quarters where they’ll lose subscribers.”Another challenge: Competitors are taking back rights to programs that have been popular on Netflix, including “Friends” and “The Office,” to use for their own services. That will force Netflix to rely even more on its original productions.Those efforts have largely been successful. Its shows just earned 117 nominations for the 2019 Emmy awards. But reruns of old shows still constitute the majority of viewing.The slowdown in users overshadowed the company’s quarterly financial results. Earnings for the second quarter fell to 60 cents a share, but beat analysts’ estimates of 56 cents. Sales grew 26% to $4.92 billion, compared with projections of $4.93 billion.The stock had been up 35% for the year at the close of regular trading, nearly double the gain of the S&P 500. The decline spread to related stocks such as Roku Inc., which makes set-top boxes that deliver the streaming service. Its shares fell as much as 2.5%, but closed little changed.(Updates with closing prices)To contact the reporter on this story: Lucas Shaw in Los Angeles at email@example.comTo contact the editors responsible for this story: Nick Turner at firstname.lastname@example.org, Rob GolumFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
AT&T; is pushing forward on the overhaul of the downtown campus as the Dallas company unveils more details.
The AT&T store at Brickell City Centre is first in Florida to carry the Magic Leap One Creator Edition, Magic Leap's first product to go to market since the Plantation-based spatial computing company launched in 2011. The store at 701 S. Miami Ave. in downtown Miami's financial district is one of just 10 stores in the U.S. to stock the device as part of an exclusive agreement between Magic Leap and the telecommunications giant (NYSE: T). Five additional stores in the U.S., including locations in Los Angeles and San Diego, also recently added Magic Leap One to their inventories.
AT&T's (T) 5G capabilities and Microsoft's Azure cloud facilitate exceptional solutions for mutual customers, and are likely to shape the future of media and communications.
(Bloomberg Opinion) -- The TV-network giants went through ratings hell. It’s time for Netflix’s own version of that. After the market closed on Wednesday, Netflix Inc. reported that it lost 126,000 U.S. streaming customers during the second quarter, which appears to be the first time it’s ever done so. Global membership growth was also well short of management’s own expectations, with 2.7 million net sign-ups versus an anticipated 5 million. The company blamed its uninspiring results on subscription price increases and a less-enticing mix of movies and TV series. While it signaled that “more typical growth” and better content is in store, shares of Netflix sold off 12%, erasing $17 billion from its market value. This marks a turning point in how investors view the future of Netflix vis-a-vis its biggest emerging threats, Walt Disney Co. and AT&T Inc. In recent years, the popularity of Netflix has been a chief reason for the accelerated drop in cable subscriptions and viewers tuning out traditional live TV. As investors were entranced by the video-streaming app’s rapid growth and awarded the company an absurdly rich valuation, companies such as Disney and Time Warner (now called WarnerMedia, a unit of AT&T) were punished by shareholders for their audience shrinkage.Those media giants’ audiences are still shrinking (see next chart), and their businesses still rely on TV commercials and cable fees to drive profit. But they have managed to change the narrative so that more attention is paid to their own streaming opportunities. Nov. 12 is the launch date for Disney+, which Disney plans to bundle with ESPN+ and Hulu for fans who want all three services. Shortly thereafter, AT&T’s WarnerMedia will introduce HBO Max, a souped-up version of the HBO app that will contain Turner network programs and Warner Bros. films. Given the relatively low price of Disney+ at $6.99 a month and the quality of Disney and HBO/Warner content, both products have the potential to lure a considerable number of streamers away from Netflix.(1)This means Netflix investors will become even more obsessed with its quarterly subscriber count. They’ll also want more real data as far as how many people are watching Netflix’s costly originals – much in the way investors have picked apart the traditional media companies’ Nielsen viewership ratings. By now you’ve heard that “Friends” is moving to AT&T’s HBO Max next year, and that Comcast Corp.’s NBCUniversal is reclaiming “The Office” in 2021. Those are the most-watched shows on Netflix, so their expiration dates create a sense of foreboding.As my colleague Shira Ovide alluded to Wednesday, Netflix may be drifting too far from what it made it so attractive in the first place: being a constant bazaar of binge-able video entertainment. By blaming its own content slate for last quarter’s weak showing, Netflix is saying that it’s not all that different from HBO, which is dependent on a select few hit programs and goes through lulls when there aren’t new episodes. I’ve written that Netflix has the benefit of already being the “base” streaming service for many people, but that could change if Netflix becomes less of a one-stop shop and other services seem to offer more bang for your buck. Disney+ launch day is just four months away. And the closer we get to D-Day, the more skittish Netflix shareholders will be. Cable-network operators know all too well what that’s like. (1) Apple TV+ is also coming later this year to challenge Netflix.To contact the author of this story: Tara Lachapelle at email@example.comTo contact the editor responsible for this story: Beth Williams at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tara Lachapelle is a Bloomberg Opinion columnist covering deals, Berkshire Hathaway Inc., media and telecommunications. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Netflix missed domestic and international subscriber estimates by wide margins, indicating that recent price hikes have taken a toll.
Ericsson (ERIC) second-quarter 2019 earnings miss by a penny, while AT&T (T) collaborates with IBM to facilitate diverse businesses to harness edge connections and edge computing capabilities.
Netflix (NFLX) adds 2.7 million subscribers in the second quarter of 2019, much less than management's expectation of 5 million.
Early on Wednesday, Microsoft (MSFT) signed a multiyear deal to offer cloud-computing services to AT&T; (T). The deal is a major win for Microsoft.
As approval for T-Mobile US Inc.’s deal with Sprint Corp. looms over the wireless industry, fellow carrier AT&T Inc. will show of the impact of its own mega-deal when the company reports second-quarter results next Wednesday after the closing bell.
Netflix Hits Growth Wall Apparently, there aren’t an infinite number of people in the world who want to subscribe to Netflix (NASDAQ:NFLX). The streaming giant passed the 150 million subscriber mark, but missed forecasts for new memberships, adding only 2.7 million new subscribers last quarter. It was only about half of what analysts were expecting. […]The post Market Morning: Netflix Hits Wall, Instagram Hides Likes, Iran Smolders Over Trump appeared first on Market Exclusive.
(Bloomberg) -- International Business Machines Corp. shares slipped after executives were tight-lipped about the company’s $34 billion Red Hat acquisition and how it will help growth in cloud computing.The deal closed last week and IBM reported quarterly results on Wednesday. Analysts tuned into a conference call to glean fresh details on the impact of adding Red Hat’s open-source software to IBM’s current offerings. But Chief Financial Officer Jim Kavanaugh declined to answer any questions on Red Hat, saying the company will share an updated financial forecast at its annual investor briefing on Aug. 2.“Everyone is looking forward to this investor update," Edward Jones analyst Logan Purk said. “It’s paramount that IBM really nails that."Second-quarter revenue fell 4.2 percent to $19.2 billion, slightly beating the average analyst estimate. It was the fourth consecutive quarter of revenue declines for the Armonk, New York-based company. The shares declined 1.5% in extended trading.After lagging in the cloud market for more than a decade, IBM is pegging its future to a hybrid cloud strategy that will allow it to offer services on both private and rival public clouds. Chief Executive Officer Ginni Rometty paid a rich premium for Red Hat in order to help the 108-year-old company catch up with cloud market leaders Amazon.com Inc. and Microsoft Corp. The deal officially closed last week, so Red Hat’s contribution hasn’t shown up in IBM’s quarterly financial reports yet.Rometty has touted the Red Hat deal, which was announced in October, as a “game changer” for IBM, claiming it will reset the entire cloud landscape. IBM has estimated only 20% of enterprise applications have made the shift to cloud so far and Rometty believes the company is in prime position to conquer the remaining market.This quarter’s results are significant because they represent the last clean read of IBM’s trajectory before the integration of Red Hat, Sanford C. Bernstein analysts Toni Sacconaghi and Corry Wang wrote in a note before the results were released.Revenue in the global technology services unit, which includes cloud infrastructure and technology support, was $6.8 billion, down 6.7%, from a year earlier. The division shrank by the same amount in the previous quarter.The drop was the result of IBM ending some unprofitable businesses, Kavanaugh said. "We will see improvements of those numbers as we get into the second half," he added. Technology services is IBM’s biggest business unit, pulling in almost 40% of total sales.Earnings excluding some costs were $3.17 a share in the three months ending June 30, higher than the $3.08 average Wall Street estimate. For the full fiscal year, IBM stuck to a forecast of at least $13.90 a share.Big Blue has reported shrinking revenue growth since 2012. There was a modest and temporary reprieve in early 2018, but the slight uptick in sales stemmed from its legacy mainframe computers, rather than newer technologies like artificial intelligence, and cloud computing. In the second quarter, IBM reported revenue growth of 3.2% in cloud and cognitive solutions, stronger than in the previous quarter.IBM’s lackluster sales are due to a cannibalization of its legacy technology and data centers, Wedbush Securities Inc. analyst Moshe Katri said in an interview before the results were released. While the company has made significant strides toward new technologies like cloud computing, these services are capital and labor light, Katri said. “It’s time to grow that business and make it really count for overall top-line growth,” he said.The future of IBM is hybrid cloud, said Ian Campbell, chief executive officer of Nucleus Research. “But the biggest challenge is they are very late to the cloud party,” he said. Amazon Web Services and Microsoft Azure have dominated the public cloud space for years and IBM, once a tech titan, is considered small-fry in comparison. “Cloud is the make or break for IBM, but nobody even knows they’re there," Campbell said.On Tuesday, IBM announced that AT&T Inc. would be shifting its internal software applications to the IBM cloud in a multi-year agreement. This is mutually beneficial for both companies, Campbell said. “But it feels like two B-list celebrities announcing an engagement in the hopes of becoming an A-lister,” he added. “This is not going to move the needle."To contact the reporter on this story: Olivia Carville in New York at email@example.comTo contact the editors responsible for this story: Jillian Ward at firstname.lastname@example.org, Molly Schuetz, Alistair BarrFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.