AT&T Inc. (NYSE: T) reported first-quarter results yesterday that it claims showcased consistent 5G and fiber customer additions and profitable growth driven by increasing wireless service and broadband revenues.
“Our teams take pride in connecting more people to greater possibility through 5G and fiber,” said John Stankey, AT&T CEO. “We’re winning thanks to a proven and sustainable playbook that centers on simple, customer-centric experiences. As a result, we’re adding high-value customers, and when they choose AT&T, they stay with us. The work we’re doing today is establishing a foundation for durable, long-term growth, and we remain confident in our full-year guidance.”
According to Jonathan Chaplin of New Street Research, service revenue, EBITDA, and EPS were right in line with estimates. FCF (Free Cash Flow) missed on timing of working capital with no change to guidance. “Wireless KPIs were all in-line,” Chaplin said. “Fiber adds missed, with the company blaming low move activity (low moves is a legitimate complaint for AT&T as a share taker; not so much for Cable). Results look uncontroversial. We don’t expect major changes to estimates. No change to thesis.”
Capital expenditures were $4.3 billion in the quarter versus $4.6 billion in the year-ago quarter. Capital investment, which includes $2.1 billion of cash payments for vendor financing, totaled $6.4 billion. Cash from operating activities from continuing operations was $6.7 billion, down nearly $1 billion YoY reflecting timing of working capital, including lower securitizations.
Revenues for the first quarter totaled $30.1 billion versus $29.7 billion in the year-ago quarter, up 1.4 percent. This increase, according to AT&T, primarily reflects higher Mobility, Mexico and Consumer Wireline revenues, partly offset by lower Business Wireline revenues.
Operating expenses were reported at $24.1 billion, essentially stable with $24.2 billion in the year-ago quarter while they decreased primarily due to lower domestic wireless equipment and associated selling costs from lower sales volumes, first-quarter 2022 3G network shutdown costs, lower personnel costs and higher returns on benefit-related assets.
Operating income was $6.0 billion versus $5.5 billion in the year-ago quarter. When adjusting for certain items, adjusted operating income was $6.0 billion versus $5.8 billion in the year-ago quarter.
Operating expenses were $14.3 billion, down 0.5 percent YoY primarily due to lower equipment costs driven by lower device sales; first-quarter 2022 3G network shutdown costs and lower content costs; partly offset by increased amortization of deferred customer acquisition costs; higher network and customer support costs; higher marketing costs and higher bad debt expense.
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