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AT&T Inc. T reported mixed first-quarter 2025 results with adjusted earnings missing the Zacks Consensus Estimate but revenues beating the same.
The company witnessed solid wireless traction and customer additions, which were partially offset by lower demand for legacy voice and data services. AT&T recorded strong subscriber growth backed by a resilient business model and robust cash flow position, driven by a diligent execution of operational plans. AT&T expects to continue investing in key areas of 5G and fiber and adjust its business according to the evolving market scenario to fuel long-term growth.
Net Income
On a GAAP basis, AT&T reported a net income of $4.39 billion or 61 cents per share compared with $3.39 billion or 47 cents per share in the year-ago quarter. The significant improvement was primarily attributable to higher contributions from the DIRECTV investments during the quarter.
Excluding non-recurring items, adjusted earnings improved to 51 cents per share from 48 cents a year ago. Adjusted earnings for the first quarter missed the Zacks Consensus Estimate by a penny. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
AT&T Inc. Price, Consensus and EPS Surprise
AT&T Inc. price-consensus-eps-surprise-chart | AT&T Inc. Quote
Quarter Details
Quarterly GAAP operating revenues increased 2% year over year to $30.63 billion, largely due to higher Mobility service and equipment sales and Consumer Wireline revenues, partially offset by lower Business Wireline and Mexico revenues. The top line beat the consensus mark of $30.44 billion.
Adjusted operating income increased to $6.35 billion from $6.01 billion for respective adjusted operating income margins of 20.7% and 20%. Adjusted EBITDA improved to $11.53 billion from $11.05 billion.
AT&T witnessed solid subscriber momentum with 290,000 post-paid net additions. This included 324,000 postpaid wireless phone additions. Postpaid churn was 0.83%, while postpaid phone-only average revenue per user (ARPU) increased 1.8% year over year to $56.56 due to improved international roaming, pricing actions and a transition to higher-priced unlimited plans.
Segmental Performance
Communications: Total segment operating revenues were $29.56 billion, up from $28.86 billion, as improvement in the Mobility business (up 4.7% to $21.57 billion) and Consumer Wireline (up 5.1% to $3.52 billion) was partially offset by a decline in Business Wireline (down 9.1% to $4.47 billion). The segment revenues surpassed our estimates of $29.52 billion.
Service revenues from the Mobility unit improved 4.1% to $16.65 billion, driven by solid subscriber and postpaid ARPU gains, while equipment revenues were up 6.9% year over year to $4.92 billion due to higher volumes of non-phone sales and higher-priced phone sales. Revenues from the Consumer Wireline business were up due to a gain in fiber broadband. AT&T recorded net fiber additions of 261,000, while Internet Air added 181,000 subscribers during the quarter.
Revenues from Business Wireline were down due to lower demand for legacy voice and data services as customers shifted to more advanced IP-based offerings. Total segment operating income improved 3.6% to $6.99 billion, with operating margins of 23.7% (up 30 bps). Adjusted EBITDA was $11.96 billion compared with $11.47 billion in the year-ago quarter.
Latin America: Total operating revenues were $0.97 billion, down 8.7% year over year, due to lower equipment sales and service revenues. Adjusted EBITDA improved to $193 million from $180 million in the year-ago quarter.