AT&T Reports Quarterly Financials, Touts FirstNet Win
Wednesday, April 26, 2017 | Comments

AT&T touted its contract award with the First Responder Network Authority (FirstNet) in its first-quarter financial results. However, the carrier reported lower revenues compared with the year-ago quarter primarily because of a record-low device upgrade rate.

AT&T's consolidated revenues for the first quarter totaled $39.4 billion versus $40.5 billion in the year-ago quarter, primarily due to record-low wireless equipment sales. Compared with results for the first quarter of 2016, operating expenses were $32.5 billion versus $33.4 billion; operating income was $6.9 billion versus $7.1 billion; and operating income margin was 17.4 percent versus 17.6 percent.

“In a very competitive quarter, we continued to execute on our goals of driving efficiencies in our business while growing adjusted earnings per share,” said Randall Stephenson, AT&T chairman and CEO. “But just as important, the strategic moves we’ve made over the last few months to expand our wireless capacity and fortify our 5G leadership will be felt for years to come. FirstNet gives us access to 20 megahertz of valuable, low-band spectrum and allows us to deploy our spectrum assets more efficiently as we build a high-quality, mobile broadband network for our first responders. And our planned acquisitions of FiberTower and Straight Path will add valuable millimeter wave spectrum assets to our 5G tool kit as we lead the way to the next generation of wireless technology.”

First-quarter net income attributable to AT&T totaled $3.5 billion compared with $3.8 billion in the year-ago quarter. Cash from operating activities was $9.2 billion in the first quarter, and capital expenditures were $6 billion. Free cash flow — cash from operating activities minus capital expenditures — was $3.2 billion for the quarter.

AT&T had 2.7 million wireless net additions with 2.1 million in the United States, driven by prepaid and connected devices. The carrier also had its best first-quarter postpaid phone churn rate of 0.9 percent. Wireless postpaid churn was 1.12 percent, including pressure from tablets.

The company updated its 2017 guidance. On a business as usual basis without the impact of Time Warner, AT&T expects adjusted earnings per share (EPS) growth in the mid-single digit range, capital expenditures in the $22 billion range and free cash flow in the $18 billion range.

The company said it no longer provides consolidated revenue guidance primarily because of the unpredictability of wireless handset sales.

In March, an AT&T executive discussed how the additional spectrum from a FirstNet contract win would improve its wireless network.

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