AT&T reported lower results for the third quarter, hurt by weakness in the consumer market and costs for hurricane damage. However, the company said it’s on track to meet its full-year targets and is confident of closing its takeover of Time Warner soon.
Revenues for the third quarter totaled $39.7 billion, down from USD 40.9 billion a year ago, due mainly to declines in legacy wireline services and consumer mobile. Hurricanes and earthquakes in the third quarter took another USD 100 million from revenue.
Highlights: U.S. wireless results:
- Expanding operating income margin of 30.5% with best-ever EBITDA margins of 42.0% and wireless service margin of 50.4%
- Best-ever third-quarter postpaid phone churn of 0.84%, showing the success of video and wireless bundling strategy
- Continued growth of postpaid smartphone base 3.0 million total wireless net adds
- 2.3 million subscribers in U.S., driven by connected devices, prepaid and postpaid
- Nearly 700,000 Mexico net adds
A reduction in operating costs led to flat operating profit of USD 6.4 billion, and the margin increased to 16.1 percent from 15.7 percent. OIBDA fell to USD 8.1 billion from USD 8.3 billion, with a flat margin of 20.3 percent.
AT&T’s net profit totaled USD 3.0 billion, or USD 0.49 per diluted share, down from USD 3.3 billion or USD 0.54 per share, a year ago. Adjusting for USD 0.25 of costs for amortization, merger and integration expenses and other items including hurricane and earthquake impacts, earnings per share was USD 0.74, the same as in the year-ago quarter.
Operating cash flow totaled USD 11.1 billion in the third quarter and USD 29.3 billion year to date. Capital expenditures rose slightly to USD 5.3 billion in the quarter, leaving free cash flow of USD 5.9 billion for the period.
October 26, 2017
