AT&T CEO John Stankey alluded to sharp execution by his company and momentum yesterday in his call with investors regarding their First Quarter’s Report for 2021.
“We continue to grow our customer relationships with strong subscriber growth in mobility,” he said, “We also continue to invest both in capital spending and in content. Our ability to drive costs out of our business and deliver strong cash flows has allowed us to invest in strategic growth. However, as you can see from the results, we’re investing wisely. We’ve been deliberate and intentional in allocating dollars that generate returns. This supports the future of our business while also optimizing the returns on strategic opportunities across our portfolio. For example, cost transformation efforts in mobility yield improved year-over-year profits while we simultaneously invested to drive customer growth,” Stankey said.
Craig Moffett of MoffettNathanson said, for AT&T’s wireless sector, the C-band auction was just the beginning. “Verizon has already committed to an additional $10B of capex over the next three years, and Verizon was, by all accounts, far ahead of AT&T already in small cell densification. And what of their costly handset giveaways? Can they be sustained?” he asked.
For AT&T Mobility, revenues were up 9.4 percent year over year to $19 billion, primarily due to higher equipment revenues. Service revenues were $14 billion, up 0.6 percent year over year as subscriber gains offset declines in international roaming revenues. The company continues to be comfortable with guidance of full-year wireless service revenue growth in the 2 percent range. Equipment revenues were $5 billion, up 45.2 percent year over year driven by smartphone sales and a mix of higher priced postpaid smartphones and higher sales of postpaid data devices. Prior year equipment revenues included the impact of COVID-19 related store closures.
Operating expenses were $13 billion, up 12.2 percent year over year due to higher equipment costs and higher content costs associated with bundling HBO Max, partially offset by lower sales costs and lower bad debt expense.
Operating income was $6.0 billion, up 3.7 percent year over year. Operating income margin was 31.5 percent, compared to 33.3 percent in the year-ago quarter.
EBITDA was $8.0 billion, up 2.3 percent year over year with EBITDA margin 42.1 percent down from 45 percent from a year ago.
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