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AT&T logo in New York. Photo: Roberto Machado Noa/LightRocket via Getty Images

AT&T reported positive earnings results for their third quarter Wednesday, beating on revenue and falling slightly short on profits. The company credits its revenue growth to WarnerMedia (its media division that was formerly called Time Warner) and its wireless business.

Why it matters: The results show that WarnerMedia, which grew its revenue by 6.5% year-over-year, may become an opportunity for growth in the short-term for AT&T. The telecom company acquired the media company in June with the intention of building a strong subscription video on-demand business and advertising business long-term.

The details: This was the first earnings report for AT&T after owning WarnerMedia for a full quarter. Earnings highlights include Turner and HBO year-over-year subscription revenue growth and strong Warner Bros. television licensing revenue growth.

  • AT&T's advertising business, Xandr, created in part through the Time Warner acquisition, also performed well. Advertising revenues were up 34%.

Yes, but: Dramatic changes to the media business haven't yet occurred, so earnings should be reflective of positive momentum of Time Warner, prior to the acquisition.

  • Last week the company shut down "Super Deluxe," its comedy production arm, but it has yet to make other sweeping changes.
  • However, executives have indicated that capital reallocations towards its new subscription video product may impact some other business, most likely some of the Turner brand cable channels.

The bigger picture: AT&T's positive earnings outlook from its media acquisition stands in stark contrast to its rival, Verizon's. In its earnings report Tuesday, Verizon suggested that the outlook for Oath, the digital media business it created last year by combining companies like AOL and Yahoo, was not strong and appears flat in the short-term.

Go deeper

1 hour ago - World

Iran confirms assassination of top nuclear scientist Mohsen Fakhrizadhe

The Iranian ministry of defense issued a statement on Friday confirming the assassination of Mohsen Fakhrizadhe, an Iranian scientist and the architect behind the Islamic Republic’s military nuclear program.

Why it matters: Fakhrizadhe was the head of the Amad project in the Iranian ministry of defense, which focused on developing a nuclear bomb until 2003.

U.K. to launch new watchdog next year to police digital giants

Photo: Muhammed Selim Korkutata/Anadolu Agency/Getty Images

The U.K. government said on Friday that it will establish next year a Digital Markets Unit, which will enforce forthcoming "pro-competition" regulations aimed at curbing some of the digital platforms like Google and Facebook.

Why it matters: This is the latest move by a government to respond to growing objections to the size and power these companies have amassed.

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