AT&T Q1 Profit Down, Beats View; Topline Miss Estimates; Stock Down In Pre-market

Telecom giant AT&T, Inc. reported Thursday that its first-quarter profit declined from last year, yet topped market estimates. Revenues were higher, but missed the Street forecast. The company further said it is on track to achieve $6 billion-plus run-rate cost savings target before the end of the year. In pre-market activity on the NYSE, the shares were losing around 4.7 percent.

John Stankey, AT&T CEO, said, “The work we’re doing today is establishing a foundation for durable, long-term growth, and we remain confident in our full-year guidance.”

In the first quarter, net income attributable to the common stock fell 12.3 percent to $4.18 billion or $0.58 per share from last year’s $4.76 billion or $0.66 per share last year.

Adjusted earnings were $0.60 per share for the period, compared to $0.63 in the prior year.

On average, 18 analysts polled by Thomson Reuters expected earnings of $0.58 per share for the quarter. Analysts’ estimates typically exclude special items.

The company’s revenue for the quarter rose 1.4 percent to $30.14 billion from $29.71 billion last year. The Street expected revenues of $30.26 billion for the quarter. The increase primarily reflected higher Mobility, Mexico and Consumer Wireline revenues, partly offset by lower Business Wireline revenues.

Service revenues grew 2.6 percent from last year to $24.62 billion, while equipment revenues fell 3.3 percent to $5.52 billion.

Domestic wireless service revenues went up 5.2 percent. Consumer broadband revenues up 7.3 percent driven by AT&T Fiber revenue growth of 30.7 percent.

In the communications segment, first-quarter revenues were $29.2 billion, up 1 percent year over year due to increases in Mobility and Consumer Wireline, which more than offset a decline in Business Wireline.

Mobility revenues were up 2.5 percent year over year to $20.6 billion due to higher service revenues, partially offset by lower equipment revenues.

In the quarter, total wireless net adds were 5.1 million including 542,000 postpaid net adds and 40,000 prepaid phone net adds.

Business Wireline revenues were down 5.5 percent year over year due to lower demand for legacy voice and data services and product simplification, partly offset by growth in connectivity services.

In pre-market activity on the NYSE, AT&T shares were trading at $18.77, down 4.72 percent.

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