AT&T reported consolidated Q3 revenues of $45.7 billion versus $39.7 billion in the year-ago quarter, up 15.3%, primarily due to the Time Warner acquisition. The company recorded a positive 4.3 million mobile net adds along with a 2.3% increase in mobile service revenues. (On a GAAP basis, service revenues declined 3.4%). However, there were declines in domestic video, legacy wireline services.
Third-quarter net income attributable to AT&T was $4.7 billion, or $0.65 per diluted share, versus $3.0 billion, or $0.49 per diluted share, in the year-ago quarter. Adjusting for $0.25 of costs for amortization, merger- and integration-related expenses and other items, earnings per diluted share was $0.90 compared to an adjusted $0.74 in the year-ago quarter, a 21.6% increase.
“I’m pleased with the progress we made on a number of fronts in the third quarter,” said Randall Stephenson, AT&T chairman and CEO. “Our U.S. wireless business is growing and it’s the single biggest contributor to our earnings and cash flow. WarnerMedia was immediately accretive in its first full quarter, contributing 5 cents to EPS, and our free cash flow grew by double digits. We’ve accomplished all this while staying focused on managing our debt portfolio. We’re on track to get to the 2.5x debt-to-EBITDA range by year-end 2019. And as we’re nearing completion of our fiber build and making pricing moves on video, we’re laying the foundation for stabilizing our Entertainment Group profitability in 2019. Across the business, I like our momentum and feel confident that we’re on track to deliver on our plans.”
Communications
- At the end of Q3, AT&T served 150.3 million wireless connections, including 77 million postpaid mobiles, 16.9 million prepaid mobiles, 8.2 million mobils via MVNO resellers, and 48.2 million connected devices.
- 4.3 million total wireless net adds: 4 million in U.S., driven by connected devices and prepaid and 907,000 in Mexico
- Mobility service revenues were up 2.3% on a comparable basis.
- 550,000 phone net adds in the U.S.
- 69,000 postpaid phone net adds
- 481,000 prepaid phone net adds
- Nearly 750,000 branded smartphones added to the base
- Third-quarter postpaid phone churn of 0.93%
- Postpaid phone-only ARPU decreased 5.1%
- versus the year-earlier quarter. On a comparable basis, phone-only ARPU was up 1.8%.
Entertainment Group
- 49,000 DIRECTV NOW net adds with 346,000 net losses in traditional video as company focuses on improving profitability and begins beta test of new streaming video device
- More than 10 million customer locations passed with fiber
WarnerMedia Highlights
- Revenues up with gains in all business units
- Turner and Home Box Office year-over-year subscription revenue growth
- Strong Warner Bros. television licensing revenue growth; box office releases included the hit films Crazy Rich Asians, The Meg and The Nun
- 37 Primetime Emmy Awards; 12 News and Documentary Emmy Awards
Xandr Highlights
- Advertising revenues grew 34%; up 22% excluding the AppNexus acquisition
- AppNexus enhances addressable advertising technology
- Consolidated Financial Results2