AT&T Reports 2020 Third-Quarter Financial Results
Thursday, October 22, 2020 | Comments

AT&T announced its financial results for the third-quarter of 2020. Overall, the company reported consolidated revenues of $42.3 billion, compared to $44.6 billion in the year-ago quarter, and cash of from operations of $12.1 billion.

Operating expenses were $36.2 billion, compared to $36.7 billion in the same quarter of the previous year. Operating income was $6.1 billion compared to $7.9 billion in the year-ago quarter, due to impact of lower revenues and operating expenses and incremental COVID-19 costs. Operating income margin was 14.5% versus 17.7% in the year-ago quarter. When adjusted for amortization and other items, operating income was $8.2 billion versus $9.9 billion in the year-ago quarter, and operating income margin was 19.4% versus 22.2% in the year-ago quarter.

Capital expenditures for the quarter were $3.9 billion, with gross capital investment of $4.5 billion. Gross capital investment, which consists of capital expenditures plus cash payments of more than $600 million for vendor payments, totaled $4.5 billion. Gross capital investment excludes First Responder Network Authority (FirstNet) reimbursements, which are expected to be about $1 billion.

Free cashflow was $8.3 billion, with a total dividend payout ratio of 45%. Net debt declined by $2.9 billion sequentially in the quarter, and net debt to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was 2.66x.

Diluted earnings per share (EPS) was 39 cents, compared to 50 cents in the same quarter last year. Adjusted EPS was 76 cents compared to 94 cents in the same quarter last year.

The company updated its guidance and now expects 2020 free cashflows of $26 billion or higher, with a dividend payout ratio in the high 50s.

“We delivered a solid quarter with good subscriber momentum in our market focus areas of connectivity and software-based entertainment,” said AT&T CEO John Stankey.

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