Summary
AT&T Inc.'s third-quarter and first nine months of 2014 results show a 2.5% increase in operating revenues, reaching $32.96 billion for the quarter and $98.01 billion year-to-date. However, operating income saw a notable decrease of 12.7% ($5.40 billion) for the quarter and 5.2% ($17.30 billion) year-to-date, largely due to increased costs in services and sales, as well as selling, general, and administrative expenses. The company's strategic shift towards IP-based services and the AT&T Next installment payment program for devices are impacting revenue recognition and costs, with higher wireless equipment revenue partially offsetting declines in legacy services. The pending acquisition of DIRECTV, announced in May 2014, remains a significant event, subject to regulatory approvals and expected to close in the first half of 2015. Net income attributable to AT&T declined by 21.3% to $3.00 billion for the quarter and 10.0% to $10.20 billion year-to-date. Diluted EPS also decreased to $0.58 for the quarter and $1.95 year-to-date. The company continues to invest heavily in its network infrastructure, with capital expenditures of $16.83 billion for the nine months ending September 30, 2014. The acquisition of Leap Wireless in March 2014 has been integrated into the wireless operations. AT&T also completed the sale of its investment in América Móvil, resulting in a significant gain for the nine-month period.
Financial Highlights
50 data points| Revenue | $32.96B |
| Cost of Revenue | $14.54B |
| Gross Profit | $18.42B |
| SG&A Expenses | $8.47B |
| Operating Expenses | $27.35B |
| Operating Income | $5.61B |
| Interest Expense | $1.02B |
| Net Income | $3.13B |
| EPS (Basic) | $0.60 |
| EPS (Diluted) | $0.60 |
| Shares Outstanding (Basic) | 5.20B |
| Shares Outstanding (Diluted) | 5.21B |
Key Highlights
- 1Operating revenues increased by 2.5% year-over-year for both the third quarter and the nine-month period, reaching $32.96 billion and $98.01 billion, respectively.
- 2Operating income declined significantly, down 12.7% to $5.40 billion for the quarter and 5.2% to $17.30 billion year-to-date, impacted by increased operating expenses.
- 3Net income attributable to AT&T decreased by 21.3% to $3.00 billion for the third quarter and 10.0% to $10.20 billion for the nine-month period.
- 4Diluted Earnings Per Share (EPS) for the quarter was $0.58, down from $0.72 in the prior year, and $1.95 year-to-date, down from $2.09.
- 5Capital expenditures for the first nine months of 2014 were $16.83 billion, a significant investment in network upgrades and expansion.
- 6The company is strategically shifting towards IP-based services and device installment plans (AT&T Next), impacting revenue recognition and cost structures.
- 7The pending acquisition of DIRECTV for approximately $48.5 billion was announced and is progressing through regulatory review, expected to close in early 2015.