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AT&T Inc. (T)

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  • Mon, May 18, 2:55 PM
    • AT&T (T +1.8%) is planning exclusive mobile content for connected cars and has eight automaker partners to work with on the initiative.
    • The company is trying to offer free or paid games and videos exclusively to the cars in an effort to sell more data, now that the market is growing more saturated with mobile phone users.
    • Partners include General Motors, Audi, and Ford. AT&T's looking at different business models to make the plan happen, including different revenue shares and an advertising infrastructure.
    • "A lot of (content and offers) can be targeted to the make and models of the vehicles," says AT&T's emerging-devices chief Chris Penrose.
    | 8 Comments
  • Tue, May 5, 11:04 AM
    • Netflix (NASDAQ:NFLX) is pressing the FCC to reject the $48B merger of AT&T (NYSE:T) and DirecTV (NASDAQ:DTV), according to regulatory filings revealed today, on complaints about market power -- as the merger could "lead to its becoming the largest (Internet service provider) in the country as well" as becoming the biggest MVPD.
    • The remarks came as Netflix officials met with more than 20 FCC staff last week.
    • "Such market power creates new incentives and abilities to harm entities that AT&T perceives as competitive threats," Netflix reps said, "and will exacerbate the anticompetitive behavior in which AT&T has already engaged."
    • Netflix shares are up 3.8% today in the wake of BofA/Merrill Lynch's heavy upgrade; AT&T is down 1.2% and DirecTV is down 0.5%.
    | 31 Comments
  • Thu, Apr. 23, 6:24 PM
    • AT&T (T +4.2%) peddled $17.5B in bonds in the third-biggest debt offering on record, as it draws funds to help pay for its acquisition of DirecTV (NASDAQ:DTV) -- a media deal that looks to be a survivor as other mergers fall apart.
    • The sale's part of a record year in debt sales; it's the third-biggest ever but only the second-largest this year, as Actavis sold $21B in March.
    • Yield-hungry investors put in $68B in orders, nearly four times the offer. A 10-year bond was priced to yield 3.435%; a 31-year bond at 4.772%.
    • The company may be getting ahead of the rush. More debt deals are likely to come ahead of any move by the Fed to raise rates, and they're likely to find investors so long as there are negative yields still in the market.
    • AT&T will redeem some bonds at a premium if the DTV deal's not done by Nov. 30, though it still exepcts a Q2 closing.
    • Previously: AT&T call: On reducing churn, and post-acquisition deleveraging (Apr. 22 2015)
    | 23 Comments
  • Wed, Apr. 22, 4:31 PM
    • AT&T (NYSE:T) is up 1.9% in postmarket trade, after beating EPS expectations but missing on revenue that it says was impacted by foreign exchange issues.
    • The company reports 1.2M total net adds in wireless, which includes 441K postpaid and 684K connected cars.
    • Churn drops to a best-ever 1.02% (from previous year's 1.07%) as the transition to no-subsidy device plans continues. (Yesterday, Verizon reported its churn fell back to 1.03%.)
    • Revenue breakdown: Service, $29.96B (down 2.7%); Equipment, $3.61B (up 33.9%). Total wireless revenues were up 1.8% to $18.2B, and wireless equipment revenues were up 36% to $3.4B. Wireline revenues were $14.1B, down 3.1% (adjust for sale of Connecticut operations, down 1.2%).
    • Wireless operating income was $4.4B (-12% as Mobile Share Value plans took off). Wireline operating income was $1.4B, down 3.5%.
    • The company still expects its acquisition of DirecTV to close in Q2 and unsurprisingly expects higher cost synergies, to reach at least $2.5B on annual run rate by the third year after closing -- up from the previously expected $1.6B.
    • Conference call at 4:30 ET (now).
    • Press release
    | 16 Comments
  • Thu, Apr. 2, 4:26 PM
    • Over-the-top video services seems to have accelerating momentum as more unbundling happens every week, but high-yield pay-TV companies have little to worry about just yet, Moody's says in a new report.
    • Customer inertia along with the limited competition they now face should buy providers time to adjust.
    • "Evolutionary, not revolutionary" is how the firm describes the pay-TV shift, saying that OTT providers, including Sony and Apple, will take a small number of subscribers for now -- even though consumer perception seems to favor OTT options.
    • The firm notes rising bills could force defections, but "the average customer may not realize how much content traditional pay TV service provides, from video on demand and across multiple devices."
    • Pay TV stocks today: (CMCSA +1.5%), (TWC +1.9%), (CVC +0.9%), (CHTR -0.6%), (T +0.7%), (VZ +1.1%)
    | 18 Comments
  • Thu, Feb. 19, 9:02 PM
    • T-Mobile (NYSE:TMUS) gained 2.7% today (and another 0.5% in late trading) following its strong Q4 report this morning.
    • In the company's call today, CEO John Legere stretched like Armstrong to make a technical point that TMUS is actually the third-biggest U.S. carrier: He says most carriers stop counting "dead" MVNO accounts after 60-90 days, while Sprint (NYSE:S) waits six months. So Legere says Sprint is overcounting by 1.7M customers and is actually behind T-Mobile.
    • CFO Braxton Carter tells the Financial Times that the company's guidance (on the low side of expectations) is "conservative" and expectations are high: "We are still taking major flow from the duopoly (T, VZ) ... We are very pleased with our first-quarter momentum."
    • T-Mobile should take a Q1 hit in front-loading customer acquisition, but it expects free cash flow to turn positive at some point this year.
    • Aside from record customer growth (fueled in part by aggressive promotion), the company pointed to highly watched synergies with its MetroPCS brand -- projecting to reach full run-rate synergies of at least $1.5B by 2016. Net present value there is expected to be $9B-10B, up from original $6B-7B projection.
    • That's finally "kicking in," says Craig Moffett: "Synergies from the PCS deal, a key driver of our bull case, are coming in sooner and higher than expected" and that the firm "has at last turned the profitability corner."
    • Related: T-Mobile US (TMUS) Q4 2014 Results - Earnings Call Transcript (Feb. 19 2015)
    | 15 Comments
  • Wed, Feb. 4, 11:42 AM
    • Breakdown of FCC Chairman Tom Wheeler's op-ed on net neutrality: "Enforceable, bright-line rules" that ban paid prioritization ("fast lanes") and blocking/throttling of services, including for mobile broadband.
    • The investment key for related stocks: "All of this can be accomplished while encouraging investment in broadband networks. ... My proposal will modernize Title II, tailoring it for the 21st century, in order to provide returns necessary to construct competitive networks. For example, there will be no rate regulation, no tariffs, no last-mile unbundling."
    • FCC voting is scheduled for Feb. 26.
    • Related stocks: (CMCSA +2.8%); (CVC +2%); (TWC +3.1%); (T +0.6%); (VZ +0.7%); (CHTR +4.3%); (DISH +2.6%); (DTV +1%); (CCOI +3.9%)
    | 5 Comments
  • Wed, Feb. 4, 11:31 AM
    • FCC Chairman Tom Wheeler has released an op-ed hinting at the commission's new stance on net neutrality rule -- and it suggests utility-like regulation for fixed and wireless broadband.
    • "This week, I will circulate ... proposed new rules to preserve the Internet as an open platform for innovation and free expression. This proposal is rooted in long-standing regulatory principles, marketplace experience, and public input received over the last several months."
    • Wheeler calls directly for Title II authority in "the strongest open Internet protections ever proposed by the FCC."
    • Stocks on the move: (CMCSA +3.3%); (CVC +2.9%); (TWC +4%); (T +0.8%); (VZ +0.7%); (CHTR +4.3%); (DISH +3.3%); (DTV +1.2%); (CCOI +4.3%)
    | 20 Comments
  • Sat, Jan. 31, 1:47 PM
    • After learning which way AT&T (NYSE:T) went (high) and which way Verizon Wireless (NYSE:VZ) went (low) in the 11-week FCC wireless spectrum auction, most attention focused on Dish Network (NASDAQ:DISH): What are they up to?
    • The satellite firm took just short of half of the available licenses (and saved over $3B by cannily working through small-business partners) but doesn't offer mobile service -- yet.
    • Dish's fortunes in this auction were linked to those of Verizon, which is widely considered a potential buyer or lessee of Dish's spectrum assets. But Dish's Charlie Ergen has pursued wireless firms before (MetroPCS and Sprint (NYSE:S)) and may see wireless mobile as the next path forward from a slower-growing business.
    • “I think [Ergen's] strategy is built around a confidence that spectrum will only become more valuable going forward,” says former FCC commissioner Robert McDowell.
    • DISH closed the day out down 4.3%, slightly below where it was sitting before the auction results were released.
    | 8 Comments
  • Thu, Jan. 22, 11:04 AM
    • AT&T (T -1.7%) and Sprint (S -2.5%) are joining Verizon in selling off (in spite of a market rally) after Big Red reported 2M Q4 postpaid net adds (including 672K phone adds), but also stated its wireless service revenue growth fell to 2.8% from Q3's 4.8% and that wireless EBITDA margin fell to 42% from 47% a year ago. Verizon also disclosed retail postpaid churn rose to 1.14% from 0.96% a year ago.
    • Verizon's service growth, margin, and churn reflect both strong phone upgrade activity (due to iPhone 6 sales and phone upgrade plan adoption) and a U.S. mobile price war that isn't showing any signs of letting up as 2015 commences.
    • Meanwhile, Verizon's Q4 postpaid adds, together with T-Mobile's strong Q4 adds, suggest AT&T may have joined Sprint in losing postpaid phone subscriber share during the quarter. Sprint has said it added 30K postpaid subs in calendar Q4 - postpaid phone adds were apparently still negative - and AT&T disclosed last month churn is trending higher in Q4.
    • AT&T reports on Jan. 27, and Sprint on Feb. 5. Sprint jumped in the final minutes of trading yesterday on a report that Google is getting ready to sell phone plans on an MVNO basis while using Sprint and T-Mobile's networks.
    | 6 Comments
  • Dec. 9, 2014, 9:48 AM
    • With price pressure from rivals as intense has ever, Verizon has warned it expects to see "short-term pressure" on its wireless margins and EPS, and that retail postpaid disconnects are "trending higher" both Q/Q and Y/Y.
    • AT&T (T -2.8%) and Sprint (S -2.3%) aren't responding well to the news; the S&P is down 0.9%. Sprint's moves under new CEO Marcelo Claure (launched in an attempt to stem ongoing postpaid share losses) appear to be contributing to Verizon's challenges. Big Red has been gaining postpaid share relative to AT&T and Sprint, though not T-Mobile.
    • T-Mobile (TMUS -5.1%) is down sharply, but shares had already sold off before the Verizon news, thanks to T-Mobile's convertible offering announcement.
    | 12 Comments
  • Nov. 24, 2014, 10:26 AM
    • Citing higher spectrum and network investment costs, and the revenue impact of tougher price competition, Citi's Michael Rolling has downgraded Verizon (VZ -1.9%) to Neutral. AT&T (T -1.9%) is following Verizon lower.
    • Rollins: "We believe the wireless industry is experiencing a great disconnect between the growth in data traffic and the growth in revenue ... We continue to fear that recent promotions create risk that the wireless industry at large may not be able to capture substantial incremental revenue from the rise in data consumption over time."
    • Verizon has largely maintained its premium pricing in the face of major price cuts from T-Mobile and Sprint, but the carrier has been offering more data promos as of late. AT&T has been more willing to return fire, and has seen its wireless service growth revenue evaporate along the way.
    • Last Friday: FCC auction bids hit $33B
    | 16 Comments
  • Nov. 10, 2014, 3:33 PM
    • After announcing in April it would launch an aggressively-priced in-flight Wi-Fi service "as soon as late 2015," AT&T (T +0.5%) has backtracked on its plans.
    • Gogo (GOGO +9.2%), whose shares plunged in response to AT&T's original announcement, is taking the news quite well. Gogo was selling off earlier today in response to the company's Q3 report.
    • AT&T's about-face comes after the carrier announced (along with the Iusacell acquisition) it would only be spending $18B on capex next year, down from $21B this year and below a prior forecast of $20B.
    | 3 Comments
  • Oct. 22, 2014, 4:32 PM
    • AT&T (NYSE:T) now expects full-year revenue to grow 3%-4% Y/Y, down from prior guidance of 5% but in-line with a 3.4% consensus.
    • Wireless service revenue was down 0.2% Y/Y in Q3, an improvement from Q2's 1.4% drop but below Verizon's 4.8% growth. With equipment sales rising 44.3% thanks to strong Next smartphone upgrade plan adoption, wireless op. margin fell 180 bps to 24.6%.
    • Wireless postpaid net adds totaled 785K, up from 363K a year ago (aided by tablet adds) but down from Q2's 1.03M; the postpaid base is at 75.1M.
    • 140K prepaid subs were lost; 405K were lost in Q2, and 192K added a year ago. The prepaid base is at 11.2M. "Connected device" net adds totaled 1.275M, with 500K coming from cars; the connected device base is at 18.5M.
    • Thanks to strong uptake for Mobile Share Value plans, phone-only postpaid ARPU fell 8% Y/Y. Postpaid churn fell 8 bps to 0.99%; total churn rose 5 bps to 1.36%.
    • Wireline revenue (44% of total revenue) fell 0.4% Y/Y, and segment op. margin fell 180 bps to 8.8%. A 10.5% Y/Y drop in voice connections to 26.2M caused the decline.
    • U-verse revenue rose 23.8% Y/Y, driving a 3% increase in residential wireline revenue. U-verse broadband and TV net adds respectively totaled 601K and 216K.
    • $221M was spent on buybacks, up from Q2's $159M but well below some recent quarters. Free cash flow was $3.5B, above net income of $3B.
    • T -1.8% AH. Q3 results, PR.
    • Update: BTIG's Walter Piecyk estimates wireless service revenue growth was -4.2%, if one backs out the impact of the Leap Wireless acquisition.
    | 12 Comments
  • Sep. 15, 2014, 2:39 PM
    • America Movil (AMX +2.4%) has contacted potential suitors including AT&T (T +0.6%) and SoftBank (OTCPK:SFTBY, OTCPK:SFTBF), and perhaps BCE’s Bell Canada (BCE -0.1%) and China Mobile (CHL +1%), as it prepares to sell assets along the east coast of Mexico that could fetch as much as $17.5B, Bloomberg reports.
    • AMX is selling assets in its biggest market to appease antitrust regulators; the Mexico-based carrier, which commands 70% of the local wireless market and 80% of landlines, may get penalties revoked if it cuts market share below 50%.
    | 1 Comment
  • Jul. 31, 2014, 1:02 PM
    • France's Iliad (OTC:ILIAF) is offering $15B in cash for a 56.6% stake in T-Mobile USA (TMUS +7.3%) at a price of $33/share. Iliad values the remaining 43.4% at $40.50/share. Sprint (S -5.3%) has been reported to be planning a ~$40/share deal.
    • Iliad says it has obtained financing from unnamed banks, and would also do a capital raise to help pay for the deal. One issue: Iliad has a current market cap of just $16B, less than T-Mobile's $24.8B and Sprint's $30.6B. Sprint has reportedly lined up a $40B+ debt package to finance a T-Mobile deal.
    • A source tells the WSJ Iliad, which has upended the French mobile market with its aggressive pricing, views a T-Mobile merger as a "one-time opportunity to enter the world's-largest telecoms market."
    • Iliad also thinks (perhaps with good reason, given FCC/DOJ remarks) regulators will be more comfortable with its bid than Sprint's, since Iliad has no U.S. presence.
    • AT&T (T -2%) and Verizon (VZ -2.3%) have joined Sprint in selling off, as investors mull the possibility of a deal that would leave the number of nationwide U.S. carriers at 4. Concerns about Iliad's pricing history might also be weighing on shares.
    • Related tickers: OTCPK:SFTBF, OTCQX:DTEGY
    • Earlier: Iliad reportedly bids for T-Mobile USA
    | 13 Comments
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Company Description
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.