Summary
AT&T Inc. reported a slight decrease in total operating revenues for the second quarter and the first six months of 2009 compared to the same periods in 2008. This decline was primarily driven by a significant drop in voice revenues, a consequence of continuing economic pressures and increased competition leading to customer disconnections of landlines and reduced usage. However, the company experienced robust growth in its wireless segment, particularly in service revenues, fueled by a growing customer base and strong demand for advanced data services, notably driven by the success of Apple's iPhone. The company's profitability, as measured by operating income, saw a notable decrease in both periods, largely attributed to the decline in voice revenues and an increase in pension and post-employment benefits (OPEB) expense. Higher cost of sales, also linked to strong iPhone sales and increased OPEB expense, further impacted profitability. Despite these challenges, AT&T continued to invest in its network infrastructure, with capital expenditures focused on wireless and wireline network upgrades and expansion, particularly for U-verse services. The company's liquidity remains solid, with substantial cash on hand and access to credit facilities.
Financial Highlights
47 data points| Revenue | $30.73B |
| Cost of Revenue | $12.91B |
| Gross Profit | $17.83B |
| SG&A Expenses | $7.57B |
| Operating Expenses | $25.36B |
| Operating Income | $5.31B |
| Interest Expense | $851.00M |
| Net Income | $3.15B |
| EPS (Basic) | $0.53 |
| EPS (Diluted) | $0.53 |
| Shares Outstanding (Diluted) | 6K |
Key Highlights
- 1Total operating revenues saw a slight decline of 0.4% in Q2 2009 and 0.5% in the first six months of 2009 compared to the prior year, primarily due to a decrease in voice revenues.
- 2Wireless service revenues showed strong growth, increasing by 9.4% in the first six months of 2009, driven by a 9.2% increase in average customers, with data ARPU growing by 25.7% in Q2 2009.
- 3Operating income decreased significantly by 16.2% in Q2 2009 and 10.4% in the first six months of 2009, impacted by declining voice revenues and increased pension/OPEB expenses.
- 4Cost of sales increased by 4.9% in Q2 2009, largely due to higher equipment costs related to strong Apple iPhone sales and increased pension/OPEB expense.
- 5Wireline segment operating income saw a substantial decline of 36.1% in Q2 2009 and 31.9% in the first six months, pressured by declining voice revenues and increasing competition.
- 6Capital expenditures in the first six months of 2009 were $7.036 billion for capital expenditures and $0.368 billion for interest during construction, with wireline segment expenditures representing 69% of the total, reflecting ongoing investment in U-verse services.
- 7The company's cash position strengthened, with cash and cash equivalents increasing to $7.348 billion at June 30, 2009, from $1.792 billion at December 31, 2008.