AT&T’s 1Q17 results affected by ‘record-low’ handset sales

26 Apr 2017

US telecoms giant AT&T Inc has reported consolidated operating revenues of USD39.365 billion for the three months ended 31 March 2017, down 2.9% from USD40.535 million on an annualised basis mainly due to ‘record-low equipment sales in the wireless sector’. AT&T’s operating income, meanwhile, decreased to USD6.864 billion, down from USD7.131 billion in Q1 2016; when adjusting for amortisation, merger- and integration-related and other items, operating income was USD8.2 billion (USD8.1 billion in 1Q16). Net income for the period under review also declined, to USD3.469 billion, from USD3.803 billion in the year-ago period.

The company also updated its 2017 guidance – on a business-as-usual basis without the impact of the Time Warner acquisition (agreed upon in October 2016), AT&T expects that its adjusted operating margin will expand by year-end, with CAPEX hovering in the USD22 billion range. The company, however, disclosed that it will no longer provide consolidated revenue guidance primarily due to the unpredictability of wireless handset sales.

In operational terms, AT&T reported a total of 134.218 million wireless subscribers in its domestic market as of 31 March 2017, broken down as 51.864 million ‘consumer mobility’ subscribers (54.674 million in 1Q16) and 82.354 million ‘business mobility’ users (75.771 million). Elsewhere, AT&T’s ‘International’ segment reported 12.606 million mobile users in Mexico as of end-March, up 36.8% year-on-year, alongside 13.678 million Latin American pay-TV customers, of which 5.588 million were located in Brazil.

Randall Stephenson, AT&T chairman and CEO, commented: ‘In a very competitive quarter, we continued to execute on our goals of driving efficiencies in our business while growing adjusted earnings per share. But just as important, the strategic moves we’ve made over the last few months to expand our wireless capacity and fortify our 5G leadership will be felt for years to come’.

United States, AT&T, AT&T Communications, AT&T Mexico