AT&T Slumps 3% On Revenue Misses

AT&T earnings

Shares of AT&T (NYSE: T) slipped 3% on Wednesday after the company reported first quarter revenue that was below estimates of Wall Street analysts. The telecommunications giant’s adjusted earnings matched estimates and were a penny higher than last year.

AT&T added 80,000 phone subscribers while its streaming service, DirecTV Now lost 83,000 subscribers. Wall Street had estimated a loss of 44,000 phone subscribers and 83,000 subscribers in DirecTV Now. Shares of AT&T have lost 8.3% in the last 12 months.

T Earnings & Outlook

Net income fell to $4.1 billion, or $0.56 per share, from $4.7 billion, or $0.75 per share, a year earlier. Excluding non-recurring items, earnings came to $0.86 per share, in line with Refinitiv estimates. Revenue climbed 17.8% to $44.8 billion, but missed Refinitiv consensus of $45.11 billion.

Revenue at AT&T’s communications division, which comprises of mobility, business wireline and entertainment, fell 0.4% to $35.4 billion. Mobility revenue increased 1.2% to $17.6 billion, while business wireline fell 3.7% to $6.5 billion. Entertainment group revenue came to $11.3 billion, down 0.9%.

Warner Media revenue was $8.4 billion, but not comparable to the year-ago period due to the timing of the Time Warner acquisition. Warner Media revenue was below expectations of $8.45 billion. Ad data unit Xandr revenue rose 26.4% to $426 million while Latin America sales fell 15.2% to $1.7 billion.

AT&T CEO Comments

AT&T Chairman and Chief Executive Randall Stephenson said, “Our first-quarter results show that we’re delivering on what we promised. We’re on plan to meet our de-leveraging goals with strong free cash flow and asset sales. We grew Entertainment Group EBITDA in the quarter and are confident we’ll meet or exceed our full-year target. FirstNet deployment continues ahead of schedule. And we are recognized for having the nation’s best wireless network, as well as the fastest network.”

“All this speaks volumes about our focus on our strategic priorities and our ability to grow our Mobility, Warner Media and emerging Xandr businesses. Our teams are executing well and have turned in a good performance to start the year,” Randall concluded.

AT&T Inc Profile

Wireless communication remains AT&T’s largest business, contributing nearly 40% of revenue. As the second- largest U.S. wireless carrier, AT&T connects more than 100 million devices, including 63 million postpaid and 16 million prepaid phone customers.

The consumer and entertainment segment (about 25% of revenue) includes the consumer fixed-line and DirecTV satellite television businesses, serving 24 million television and 14 million Internet access customers.

Warner Media (formerly Time Warner) now contributes about 18% of revenue with media assets that include HBO, the Turner cable networks, and the Warner Brothers studios. Fixed-line business communications (15%), Latin American satellite television (3%), and Mexican wireless services (2%) constitute the remainder of the firm.