Post Earnings Coverage as AT&T Earnings In-line with Expectations

Upcoming AWS Coverage on Consolidated Communications Holdings Post-Earnings Results

LONDON, UK / ACCESSWIRE / February 2, 2017 / Active Wall St. announces its post-earnings coverage on AT&T Inc. (NYSE: T). The Company reported its fourth quarter fiscal 2016 results on January 25, 2017. The Telecom giant’s revenue edged down marginally, missing market estimates. Register with us now for your free membership at:

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One of AT&T’s competitors within the Telecom Services – Domestic space, Consolidated Communications Holdings, Inc. (NASDAQ: CNSL), announced on January 25, 2017, that it will release its Q42016 financial results on February 23, 2017 before the market opens. The Company will host a conference call and webcast on the same day at 11 a.m. ET to discuss results. AWS will be initiating a research report on Consolidated Communications Holdings in the coming days.

Today, AWS is promoting its earnings coverage on T; touching on CNSL. Get our free coverage by signing up to:

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http://www.activewallst.com/registration-3/?symbol=CNSL

Earnings Reviewed

AT&T’s consolidated revenues totaled $41.8 billion versus $42.1 billion in the year ago same quarter, and also came in below analysts’ estimates of $42.04 billion. The Company reported Q4 2016 operating income of $4.2 billion compared to operating income of $7.5 billion in Q4 2015, and operating income margin of 10.2% versus 17.9% in Q4 2015.

Q4 2016 net income attributable to AT&T totaled $2.4 billion, or $0.39 per diluted share, compared to $4.0 billion, or $0.65 per diluted share, in Q4 2015. After adjusting for $0.10 non-cash actuarial loss on benefit plans from the annual remeasurement process and $0.17 of costs for amortization, merger-and integration-related costs, and other items, earnings per diluted share was $0.66, in-line with Wall Street’s estimates.

Full-Year Results

For FY16, AT&T’s consolidated revenues totaled $163.8 billion versus $146.8 billion, up 11.6% y-o-y. For FY16, net income attributable to AT&T was $13.0 billion versus $13.3 billion, down 2.8%. On an adjusted basis, the Company’s operating income was $31.8 billion in FY16 versus $27.7 billion and operating income margin was 19.4% versus 18.8% for FY15. For FY16, AT&T’s earnings per diluted share was $2.10 compared to $2.37, and on an adjusted basis earnings per share totaled $2.84, reflecting a 4.8% increase compared to $2.71 for the prior year.

Segment Results

For Q4 2016, AT&T’s total revenue from its Business Solutions segment was $18.03 billion, down 1.0% on a y-o-y basis driven by continued declines in its legacy voice and data services and lower equipment revenues, and partially offset by growth in mobility and strategic business services. The Business operating income was $4.02 billion, up 8.1%, while operating margin was 22.3% compared to 20.4% in Q4 2015 with growth in wireless and IP revenues and cost efficiencies slightly offsetting declines in higher-margin legacy services.

As of December 31, 2016, AT&T had approximately 81.4 million business wireless subscribers compared to 73.7 million at December 31, 2015. During Q4 2016, business wireless net adds for connected devices were 1.3 million and postpaid net adds were 250,000. Postpaid business wireless subscriber churn was 1.11% in the reported quarter compared to 1.10% in the year ago same quarter. During Q4 2016, AT&T added 14,000 high-speed internet business subscribers, bringing total business IP broadband to 977,000 subscribers.

Entertainment Group Segment

AT&T’s Entertainment Group segment includes the results of the US satellite-based DIRECTV operations as well as broadband and wired voice services to domestic residential customers. Entertainment revenues for Q4 2016 were $13.2 billion, up 1.6% versus the year ago comparable quarter due to DIRECTV video revenues and strong growth in consumer IP broadband. The Entertainment segment operating margin was 10.3% in the reported quarter, compared to 11.1% in the year-earlier quarter.

At December 31, 2016, Entertainment division had approximately 50.7 million revenue connections compared to 52.2 million at December 31, 2015. During Q4 2016, the Company added 235,000 satellite subscribers. AT&T had approximately 14.2 million broadband connections at December 31, 2016 compared to 14.3 million at December 31, 2015. During the reported quarter, AT&T added 136,000 IP broadband subscribers, for a total of 12.9 million at December 31, 2016.

Consumer Mobility Segment

For Q4 2016, revenues from AT&T’s Consumer Mobility segment, which consist of consumer, wholesale, and resale subscribers located in the US, were $8.4 billion, down 3.8% versus the year ago same quarter, reflecting a $511 million decline in postpaid service revenues due to the popularity of Mobile Share plans and migrations of customers to the Company’s Business segment. The Consumer Mobility operating margin was 26.0% compared to 24.5% in Q4 2015 with lower volumes, fewer subsidized sales, and cost efficiencies more than offsetting service revenue pressure.

AT&T reported approximately 53.5 million Consumer Mobility subscribers at December 31, 2016, compared to 55.0 million at December 31, 2015. During Q4 2016, the Company had branded net adds of 676,000 (prepaid net adds were 406,000 and consumer postpaid net adds were 270,000). Total customer churn of Consumer Mobility subscribers was 2.43% in Q4 2016 versus 1.97% in Q4 2015.

International Segment

For Q4 2016 AT&T International segment, which consists of the Latin American operations acquired in July 2015 acquisition of DIRECTV as well as the Mexican wireless operations acquired earlier in 2015, reported operating revenues of $1.9 billion, up 3.2% versus the prior year. Video service revenues in Latin America were $1.3 billion, up 4.6% versus the prior year, and wireless service revenues in Mexico were $648 million, down 0.8% compared to Q4 2015. At December 31, 2016, the Company had approximately 12.0 million wireless subscribers in Mexico and 12.5 million video connections in Latin America.

Cash Flow & Balance Sheet

Cash from operating activities was $10.1 billion and capital expenditures were $6.5 billion in Q4 2016. Free cash flow, cash from operating activities minus capital expenditures, was $3.7 billion for the reported quarter, up 19.2% versus the year-ago same quarter. AT&T’s full-year cash from operating activities was a record $39.3 billion, up from $35.9 billion in 2015. Full-year free cash flow was $16.9 billion compared to $15.9 billion in 2015.

2017 Outlook

For FY17, AT&T expects consolidated revenue growth in the low-single digits. The Company is forecasting adjusted EPS growth in the mid-single digit range and capital expenditures to be approximately $22 billion, while free cash flow is expected to be approximately $18 billion for the coming year.

Stock Performance.

At the close of trading session on February 01, 2017, AT&T’s stock price slightly declined 0.24% to end the day at $42.06. A total volume of 32.06 million shares were exchanged during the session, which was above the 3-month average volume of 22.37 million shares. The Company’s share price has gained 15.65% in the past three months and 22.27% in the last twelve months. The stock currently has a market cap of $258.29 billion. The Company’s shares are trading at a PE ratio of 20.05 and have a dividend yield of 4.66%.

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