Oct. 21, 2014, 5:35 PM
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Jul. 29, 2014, 5:30 PM
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Jul. 23, 2014, 5:01 PM
- AT&T (NYSE:T) had 1.03M mobile postpaid net adds in Q2, above June guidance of 800K+. 707K smartphone net adds and 366K tablet net adds fueled the increase, which compares with 1.4M postpaid adds for Verizon.
- However, prepaid subs fell by 405K, a decline much worse than Q1's 50K. Part of the decline stemmed from the loss of Cricket (Leap Wireless) subs. Reseller sub losses totaled 164K vs. 206K in Q1.
- Wireless service revenue -1.4% Y/Y to $15.1B (46% of total revenue), and contributing to the Q2 miss; AT&T previously guided for no Q2 growth, as the adoption of cheaper Mobile Share plans take their toll. Phone-only postpaid ARPU fell 7.7%.
- On the bright side, postpaid churn fell to 0.86% from 1.02% a year ago. 80% of postpaid phone subs have smartphones vs. 73% a year ago.
- Wireless equipment sales (pressure margins) +44.8% to $2.8B thanks to strong adoption of AT&T's Next smartphone upgrade plans (drove 3.1M smartphone gross adds/upgrades). Wireless EBITDA margin fell 220 bps to 35.5%.
- Wireline revenue -0.9% to $14.6B (45% of total) . Wireline voice connections fell by 758K to 27M, and broadband connections by 55K to 16.4M. U-verse TV connections grew by 190K to 5.9M.
- U-verse revenue +24.8% Y/Y, allowing residential revenue to rise 3% to $5.7B. Business revenue fell 2.9% to $8.7B.
- Only $159M was spent on buybacks, a big slowdown from recent quarters.
- AT&T is reiterating guidance for 2014 free cash flow of ~$11B, and capex of $21B.
- Q2 results, PR
Jul. 23, 2014, 4:03 PM
Jun. 3, 2014, 2:48 PM
- AT&T's (T -0.6%) forecast for 2014 EPS growth to be at the low end of a prior mid-single digit growth is overshadowing its revenue guidance hike.
- Also: AT&T says it expects no wireless service revenue growth in Q2, as a T-Mobile-fueled price war pressures its ARPU. Service revenue grew 2.2% Y/Y in Q1, and 4.8% in Q4.
- Q2 wireless service EBITDA margin (already under pressure in Q1) to be dinged in Q2 by service revenue weakness and higher equipment sales; the latter stems from strong adoption of AT&T's Next smartphone upgrade plans. The margin is expected to be above 40% from Q2-Q4; it was at 45.4% in Q1.
- One bright spot: Q2 wireless postpaid net adds are expected to top 800K, after coming in at 625K in Q1. Postpaid churn is expected to be at 0.95% or lower, down from 1.02% a year ago.
- Next smartphone sales are expected to rise to 3.2M from Q1's 2.9M, and make up ~50% of total sales. Roughly half of all postpaid smartphone subs are now on subsidy-free Mobile Share Value plans, and ~2/3 are expected to be on one by year's end.
May 5, 2014, 5:30 PM
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May 1, 2014, 8:01 AM
- Thanks to aggressive pricing and a slew of promotions, T-Mobile (TMUS) added 1.3M branded postpaid subs (1.2M phone subs), 465K branded prepaid subs, and 600K non-branded subs in Q1. The branded postpaid figure dwarfs Verizon's (VZ) 539K and AT&T's (T) 625K - the difference in phone adds is even larger - and compares with a net loss of 333K for would-be suitor Sprint (S).
- Regulators mulling a Sprint/T-Mobile tie-up are doubtlessly paying attention, and the same goes for AT&T and Verizon: The former has responded more aggressively to T-Mobile's price cuts thus far than the latter.
- Thanks to the strong Q1 numbers, which come after T-Mobile added 1.645M total subs (869K branded postpaid) in Q4, the carrier now expects 2.8M-3.3M branded postpaid net adds in 2014, up from a prior 2M-3M. Cash capex is still expected to be in a range of $4.3B-$4.6B.
- At the same time, T-Mobile's strategy continues taking a near-term toll on its bottom line: Adjusted EBITDA fell 26% Y/Y to $1.09B, and T-Mobile has cut its full-year adjusted EBITDA guidance to $5.6B-$5.8B from $5.7B-$6B. Adjusted EBITDA margin fell 400 bps Q/Q to 20%.
- Service revenue rose 4.5% Y/Y to $5.34B. Branded postpaid churn fell 20 bps Q/Q and 40 bps Y/Y to 1.5% (a new record). ARPU fell $0.69 Q/Q to $50.01. "Simple free cash flow" (adjusted EBITDA - cash capex) was $141M, down from $357M in Q4 and $239M a year ago.
- TMUS +7.6% thanks to the sub adds and a Bloomberg report stating Sprint has lined up financing for a bid. Sprint +6.2%. T-Mobile parent Deutsche Telekom (DTEGY) is up 2.9% in Frankfurt.
Apr. 23, 2014, 12:46 PM
- Though investors aren't thrilled with AT&T's (T -3.3%) Q1 wireless numbers, Wells Fargo (Outperform) calls them "big time solid." The firm notes net adds and churn were better-than-expected, and thinks Q1 results suggest the telco's 2014 guidance is "quite achievable."
- Morgan Stanley (Equal-Weight) is less charitable: It estimates 500K of AT&T's 625K postpaid net adds came from tablets, and notes cheaper Mobile Share plans - launched following intense price competition and promotional efforts from T-Mobile (TMUS -3%) - led wireless service revenue growth to fall.
- Canaccord observes strong uptake for Next upgrade plans boosted subscriber adds, but expects the trend to moderate. The firm has cut its 2014 EPS estimate to $2.69 from $2.78 (consensus is at $2.71).
- On the CC (transcript), management talked up the ability of Next adoption to lower subsidy expenses, and mentioned U-verse revenue is now on a ~$14B/year run rate.
- Strong U-verse growth has narrowed AT&T's wireline revenue declines, albeit while pressuring margins. The company promises wireline margins (-110 bps in Q1 to 10%) will improve in 2016.
Apr. 22, 2014, 4:22 PM
- AT&T (T) had 625K postpaid net adds in Q1 (313K via branded tablets), up from 566K in Q4. Connected device net adds totaled 693K; prepaid and reseller net losses respectively totaled 50K and 206K.
- However, wireless service revenue rose just 2.2% Y/Y, down from 4.8% in Q4 (did price cuts play a role?). Meanwhile, wireless op. margin only rose 30 bps to 28.3% after growing 690 bps in Q4.
- Churn was at 1.39% vs. 1.43% in Q4 and 1.38% a year ago. Smartphones now account for 78% of AT&T's postpaid base, up from 77% in Q4 and 72% a year ago. AT&T's Next upgrade program saw 2.9M sign-ups. That contributed to a 52% Y/Y increase in equipment sales (pressured margins).
- Total wireless subs +8% Y/Y to 116M. Postpaid subs +4% to 73.3M.
- Wireline revenue fell 0.4% Y/Y vs. 1.4% in Q4; op. margin fell 110 bps to 10%. 634K and 201K U-verse Internet and TV subs were added vs. 630K and 194K in Q4. Total U-verse revenue rose 29% Y/Y.
- Wireline voice connections -11% Y/Y to 27.7M, broadband connections nearly flat at 16.5M, video connections +19% to 5.7M.
- $1.2B was spent on buybacks, down from $1.9B in Q4. AT&T is reiterating full-year capex and free cash flow guidance of $21B and $11B, respectively.
- Q1 results, PR
Apr. 22, 2014, 4:02 PM
Apr. 22, 2014, 12:10 AM
Apr. 21, 2014, 5:35 PM
Jan. 28, 2014, 4:27 PM
Jan. 28, 2014, 12:10 AM
Jan. 27, 2014, 5:35 PM
Jan. 23, 2014, 2:50 AM
- AT&T (T) will book a non-cash gain of approximately $7.6B on its Q4 earnings, due to changes in its pension fund and retiree benefit plans.
- AT&T has altered its assumptions on interest rates and is enjoying a better-than-expected return on assets,
- However, the carrier is also taking a $500M charge for a voluntary retirement package that 4,200 workers accepted. (8-K)
- Meanwhile, AT&T has sold an office complex east of San Francisco to MetLife (MET) and Sunset Development for over $250M. AT&T will lease back half of the 1.8M square foot property. MetLife will own 49% of the asset.
T vs. ETF Alternatives
AT&T Inc, through its subsidiaries and affiliates, provides wireless and wireline telecommunications services in the United States and internationally. The Company has three reportable segments: Wireless, Wireline, and Other.
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