AT&T Q1 2019 Earnings Highlights

by hyousef333

  • Diluted EPS of $0.56 as reported compared to $0.75 in the year-ago quarter
  • Adjusted EPS of $0.86 compared to $0.85 in the year-ago quarter
  • Consolidated revenues of $44.8 billion
  • Cash from operations of $11.1 billion, up 24%
  • Capital expenditures of $5.2 billion
  • Free cash flow of $5.9 billion

Q1 Results

Communications Highlights

  • Mobility:
    • Service revenues up 2.9%; operating income and EBITDA growth with postpaid phone and prepaid net adds
    • 179,000 postpaid smartphone net adds in the U.S.
      • 80,000 postpaid phone net adds
    • 96,000 prepaid net adds of which 85,000 are phones
  • Entertainment Group:
    • 13% operating income growth with solid ARPU gains
    • 6.9% EBITDA growth as company targets stability
    • Focus on long-term value customer base
      • 22.4 million premium TV subscribers – 544,000 net loss
      • 1.5 million DIRECTV NOW subscribers – 83,000 net loss
    • Nearly 300,000 AT&T Fiber gains; 45,000 broadband net adds with broadband revenue growth of more than 8%
    • 12.4 million customer locations passed with fiber

WarnerMedia Highlights

  • Solid revenue growth with strong operating income growth with gains in all business units
    • Turner subscription revenue growth
    • HBO digital subscriber growth continued as last season of Game of Thrones begins
    • Strong Warner Bros. revenue and operating income growth

Latin America Highlights

  • 93,000 Mexico wireless net adds

Xandr Highlights

  • Advertising revenues grew by 26.4% largely due to the AppNexus acquisition

Consolidated Results

  • Q1 consolidated revenues totaled $44.8 billion versus $38.0 billion in the year-ago quarter, up 17.8%, primarily due to the Time Warner acquisition.
  • Operating expenses were $37.6 billion versus $31.8 billion in the year-ago quarter, an increase of about $5.8 billion due to the Time Warner acquisition and higher commission amortization from adopting new accounting standards last year, partially offset by lower wireless equipment costs and cost efficiencies.
  • Operating income was $7.2 billion versus $6.2 billion in the year-ago quarter, primarily due to the Time Warner acquisition, with operating income margin of 16.1% versus 16.3%
  • Q1 net income attributable to AT&T was $4.1 billion, or $0.56 per diluted share, versus $4.7 billion, or $0.75 per diluted share, in the year-ago quarter.
  • Cash from operating activities was $11.1 billion, and capital expenditures were $5.2 billion.
  • Capital investment – which consists of capital expenditures plus cash payments for vendor financing – totaled $6.0 billion, which includes about $800 million of cash payments for vendor financing.
  • Free cash flow — cash from operating activities minus capital expenditures — was $5.9 billion for the quarter.
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