AT&T lifts revenues, profit in Q4 boosted by 5G, fibre customer additions

AT&T said results for full-year 2023 passed expectations, helped by solid 5G and fibre subscriber gains. Namely, postpaid phone net gains hit 1.7 million for the full year, including 526,000 in the fourth quarter, while additions at AT&T Fiber reached 1.1 million for 2023 and 273,000 in Q4. The carrier noted that this was the 16th quarter in a row with over fibre 200,000 net adds, and sixth year in a row of 1 million or more gains. 

CEO John Stankey said the company did what it set out to do, namely, deliver sustainable growth and improved cash flow while attracting and retaining profitable customers. 

Operating expenses halve in Q4

Revenues for the quarter rose 2.2 percent year-on-year to USD 32.0 billion, boosted mainly by the company’s wireless operations (Mobility), but also Mexico and Consumer Wireline. Business Wireline revenues continued its decline, a trend also noted at Verizon.

In-line with the company’s plan to reduce costs, operating expenses were almost halved to USD 26.8 billion from 52.4 billion. The operating result also improved, going to a profit of USD 5.3 billion from a loss of 21.1 billion. The adjusted operating profit lifted to USD 5.8 billion from a profit of 5.7 billion. The profit from continuing operations advanced to USD 2.6 billion from a loss of 23.1 billion, with earnings per share at USD 0.30 from a loss per share of 3.20. The adjusted EBITDA strengthened to USD 10.55 billion from 10.23 billion.

The operating cash flow improved by USD 1.0 billion to USD 11.4 billion, while capex reached USD 4.6 billion. This put the free cash flow at USD 6.4 billion.

For the full-year, revenues climbed 1.4 percent to USD 122.4 billion, with operating expenses reducing to USD 99.0 billion from 125.3 billion, the operating profit advancing to USD 23.5 billion from a loss of 4.6 billion, the profit from continuing operations going higher to USD 15.6 billion from a loss of 6.9 billion and the adjusted EBITDA up to 43.40 billion from 41.46 billion. With capex at 17.9 billion, the operating cash flow from continuing operations rose to USD 38.3 billion from 35.8 billion and the free cash flow went to USD 16.8 billion.

Revenues lift at Mobility, Consumer Wireline

At Mobility, revenues for the quarter increased by 4.1 percent to USD 22.4 billion, helped by service and equipment revenues rising 3.9 percent and 4.7 percent respectively, and amid total communication revenues up 1.4 percent to USD 30.8 billion. Total postpaid net additions amounted to 759,000, including the 526,000 postpaid phone additions, 281,000 other net adds, 48,000 postpaid tablet and other branded computing device losses, and 132,000 prepaid phone net losses. Pospaid churn was unchanged at 1.01 percent and postpaid phone ARPU went higher by 1.4 percent to USD 56.23. 

At Consumer Wireline, revenues went up by 3.8 percent to USD 3.4 billion, with legacy voice and declines offset by broadband revenues rising 8.3 percent, helped by fibre growth of almost 22 percent. Total broadband gains, excluding DSL, reached 19,000, including the 273,000 AT&T Fiber gains, and the gains of 67,000 at AT&T Internet Air, offsetting non-fibre losses. 

Business Wireline revenues dropped over 10 percent to USD 5.1 billion on lower demand for legacy voice and data services, partly offset by growth in connectivity services. The operating profit sank 69.4 percent to USD 165 million.

AT&T to push adjusted EPS growth for 2025

Looking ahead, AT&T is guiding for wireless service growth in the 3 percent range, broadband revenue growth of over 7 percent, adjusted EBITDA up by around 3 percent, free cash flow of USD 17-18 billion and capex in the USD 21-22 billion as expected.

Adjusted EPS should reach USD 2.15-2.25, pulled down by higher depreciation expenses, plus less contributions from the company’s DirecTV investment.

For 2025, AT&T is aiming to deliver adjusted EPS growth.

The carrier added finally that its 5G network now covers more than 210 million people, achieving its end-of-year target, and that its fibre network now passed over 26 million people, on track to reach 30 million by the end of 2025.