Post Earnings Coverage as AT&T's Adjusted Earnings Increased on a Y-o-Y Basis; Adds 2.7 Million Wireless Customers
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Upcoming AWS Coverage on Frontier Communications Post-Earnings Results
LONDON, UK / ACCESSWIRE / May 1, 2017 / Active Wall St. announces its post-earnings coverage on AT&T Inc. (NYSE: T). The Company announced its first quarter fiscal 2017 results on April 26, 2017. The telecommunications giant's earnings numbers met market estimates. Register with us now for your free membership at:
One of AT&T Inc.'s competitors within the Telecom Services - Domestic space, Frontier Communications Corp. (NASDAQ: FTR), announced on April 11, 2017, that it plans to release Q1 2017 results on Tuesday, May 02, 2017 after the market closes, and to host a conference call that afternoon at 4:30 P.M. ET. AWS will be initiating a research report on Frontier Communications in the coming days.
Today, AWS is promoting its earnings coverage on T; touching on FTR. Get our free coverage by signing up to:
For the three months ended March 25, 2017, AT&T's consolidated revenues totaled $39.4 billion versus $40.5 billion in the year-ago same quarter, primarily due to record-low equipment sales in wireless. The Company's revenue number came in below analysts' consensus of $40.5 billion.
For Q1 2017, AT&T's operating income was $6.9 billion compared to $7.1 billion in Q1 2016. The Company's operating income margin was 17.4% versus 17.6% for the year earlier comparable quarter. When adjusting for amortization, merger- and integration-related and other items, the Company's operating income was $8.2 billion versus $8.1 billion and operating income margin was 20.7%, up 80 basis points versus the year ago same quarter.
For Q1 2017, net income attributable to AT&T totaled $3.5 billion, or $0.56 per diluted share, compared to $3.8 billion, or $0.61 per diluted share, in Q1 2016. Post adjustment for $0.18 of costs for amortization, merger- and integration-related and other items, the Company's earnings per diluted share was $0.74 compared to an adjusted $0.72 per share in the prior year's same period and met Wall Street's estimates of $0.74 per share.
AT&T's cash from operating activities was $9.2 billion in Q1 2017, and capital expenditures were $6.0 billion. The Company's free cash flow for the reported quarter was $3.2 billion.
Segment Details
For Q1 2017, AT&T's total first-quarter revenues from business customers were $16.8 billion, down 4.3% versus the year-earlier corresponding quarter due to declines in legacy wireline services and fewer wireless equipment upgrades. The segment's Q1 2017 operating income margin was 25.9%, up 150 basis points y-o-y with growth in wireless and IP revenues and cost efficiencies offsetting declines in higher-margin Legacy services.
During Q1 2017, Business wireless revenues were down 2.1% y-o-y to $9.4 billion due to lower equipment revenues from lower sales. Wireless service revenues were up 0.9% year-over-year, reflecting smartphone and tablet gains and continued migration from consumer plans. In business wireline, declines in legacy products were partially offset by continued growth in strategic business services. Total business wireline revenues were $7.4 billion, down 7.0% y-o-y.
During Q1 2017, AT&T's strategic business services, revenues grew by $223 million, or 8.1%, versus the year-earlier same quarter. These services represent 40% of total business wireline revenues and an annualized revenue stream of early $12 billion. Growth in strategic business services helped offset a decline of $743 million in legacy services in the quarter.
Net Adds
At the end of Q1 2017, AT&T had more than 82 million business wireless subscribers. The Company's Business Solutions lost 125,000 postpaid subscribers, mostly due to tablet losses, and added 2.6 million connected devices in the reported quarter. This was the highest-ever increase in connected devices. Postpaid business wireless subscriber churn was 1.07% versus 1.02% in the year-ago same quarter. During the reported quarter, AT&T also added 4,000 high-speed IP broadband business subscribers. Total business broadband had a loss of 25,000 subscribers.
During Q1 2017, AT&T's Entertainment Group total revenues were $12.6 billion, generally flat versus the year-earlier comparable quarter. Total video revenues were up 1.3% with satellite gains more than offsetting declines in IPTV.
AdWorks continues to show strong gains with revenues up 6.3%. Broadband revenues were up nearly 3% in the quarter with IP broadband growing by 7.7%. The segment's operating income totaled $1.6 billion, up slightly from the year-ago same quarter, while operating income margin was 12.7%, up from 12.6% in Q1 2016.
Entertainment Group EBITDA margin was 23.9% compared to 24.3% in Q1 2016, with video and IP broadband revenue growth and cost efficiencies mostly offsetting TV content-cost pressure, declines in legacy services and the impact of storms on the West Coast in the reported quarter.
The Entertainment Group had a net gain of 242,000 IP broadband subscribers during Q1 2017 with DSL losses of 127,000, for a total broadband subscriber growth of 115,000. IP broadband subscribers at the end of the quarter totaled 13.1 million.
Total revenues from Consumer Mobility customers totaled $7.7 billion, down 7.1% versus the year-earlier corresponding quarter, reflecting fewer phone sales and upgrades and lower postpaid service revenues mostly due to migrations to business plans
AT&T's Consumer Mobility operating income totaled $2.3 billion, down 6.2% versus Q1 2016. The segment's reported quarter operating income margin was 30.2%, up from the year earlier comparable quarter with lower volumes, fewer subsidized sales, and increased cost efficiencies offsetting service-revenue pressure. Consumer Mobility EBITDA margin was 41.5% compared to 41.0% in Q1 2016. EBITDA service margin was 48.6%, down from 49.2% in the year-ago same quarter.
At the end of Q1 2017, AT&T had 51.9 million Consumer Mobility subscribers. In the reported quarter, Consumer Mobility lost 353,000 total subscribers with 282,000 prepaid and 19,000 connected devices net adds partially offsetting a loss of 66,000 postpaid and 588,000 reseller subscribers.
Stock Performance
At the close of trading session on Friday, April 28, 2017, AT&T's stock price marginally declined 0.70% to end the day at $39.63. A total volume of 24.99 million shares were exchanged during the session, which was above the 3-month average volume of 18.88 million shares. The Company's share price has gained 7.46% in the past twelve months and 11.36% in the past six months. The Company's shares are trading at a PE ratio of 19.39 and have a dividend yield of 4.95%. The stock currently has a market cap of $245.59 billion.
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