Summary
AT&T Inc. reported solid revenue growth for the first quarter of 2014, with operating revenues increasing by 3.6% year-over-year to $32.5 billion. This growth was primarily driven by the wireless segment, fueled by the company's AT&T Next installment plan for devices and an expanding subscriber base. The company also saw continued strength in its U-verse and strategic business services within the wireline segment, which helped offset declines in legacy voice and data products. While net income saw a slight decrease of 1.3% to $3.65 billion, diluted earnings per share remained stable at $0.70. The company's strategic investments in network expansion and the recent acquisition of Leap Wireless are key areas of focus. AT&T continues to manage its debt effectively, with a debt ratio of 46.6%, and demonstrates a commitment to returning value to shareholders through dividends and share repurchases, with a new authorization for 300 million shares approved.
Financial Highlights
49 data points| Revenue | $32.48B |
| Cost of Revenue | $13.32B |
| Gross Profit | $19.16B |
| SG&A Expenses | $8.26B |
| Operating Expenses | $26.20B |
| Operating Income | $6.33B |
| Interest Expense | $860.00M |
| Net Income | $3.69B |
| EPS (Basic) | $0.71 |
| EPS (Diluted) | $0.70 |
| Shares Outstanding (Basic) | 5.22B |
| Shares Outstanding (Diluted) | 5.24B |
Key Highlights
- 1Operating revenues increased 3.6% to $32.5 billion, driven by strong performance in the wireless segment due to device sales on the AT&T Next installment plan.
- 2Wireless segment operating income grew 8.1% to $5.03 billion, with an improved operating margin of 28.3%, reflecting successful strategies in high-value smartphone and prepaid subscriber acquisition.
- 3Net income attributable to AT&T decreased slightly by 1.3% to $3.65 billion, resulting in diluted earnings per share of $0.70, consistent with the prior year.
- 4The company completed the acquisition of Leap Wireless International, Inc. on March 13, 2014, adding approximately 4.5 million prepaid subscribers.
- 5Capital expenditures increased significantly, totaling $5.7 billion for the quarter, primarily for network upgrades and expansion (Project VIP) in both wireless and wireline segments.
- 6AT&T repurchased approximately 37 million shares for $1.24 billion during the quarter and announced a new authorization to repurchase up to 300 million shares.
- 7The wireline segment experienced a decline in operating income by 10.5% to $1.46 billion, impacted by ongoing shifts from legacy voice and data products to IP-based services and increased U-verse content costs.