Summary
AT&T Inc. reported its financial results for the second quarter and the first six months of 2019. Total operating revenues increased by 15.3% and 16.6% respectively, largely driven by the acquisition of Time Warner (now WarnerMedia) in June 2018. However, net income attributable to AT&T decreased by 27.7% for the quarter and 20.3% for the six-month period, primarily due to a significant increase in interest expense and other income (expense) - net, which included large actuarial losses related to pension and postretirement benefits. The company continues to focus on integrating its operations and managing its debt while investing in its network infrastructure. The Communications segment demonstrated stable revenue growth, particularly in its Mobility business, with increasing wireless service revenue and average revenue per user (ARPU). Despite a slight decline in overall video subscribers, the Entertainment Group saw growth in high-speed internet revenues, driven by fiber services. The Business Wireline segment experienced a revenue decline, though strategic and managed services showed growth. The WarnerMedia segment, still in its early stages post-acquisition, is showing strong revenue contributions across its Turner, Home Box Office, and Warner Bros. units. The Latin America segment faced headwinds from foreign exchange pressures, while Xandr showed revenue growth, driven by the AppNexus acquisition. Despite the reported net income decline, AT&T's cash flow from operations saw a significant increase, bolstered by contributions from WarnerMedia and improved working capital management. The company also made progress in managing its debt obligations and maintained compliance with its credit facility covenants. Management remains focused on strategic initiatives, including network upgrades and the integration of WarnerMedia, aiming for long-term growth and shareholder value.
Financial Highlights
48 data points| Revenue | $44.96B |
| SG&A Expenses | $9.84B |
| Operating Expenses | $37.46B |
| Operating Income | $7.50B |
| Interest Expense | $2.15B |
| Net Income | $3.71B |
| EPS (Basic) | $0.51 |
| EPS (Diluted) | $0.51 |
| Shares Outstanding (Basic) | 7.32B |
| Shares Outstanding (Diluted) | 7.35B |
Key Highlights
- 1Total operating revenues increased by 15.3% to $44.96 billion for the quarter and 16.6% to $89.78 billion for the six months, primarily due to the acquisition of Time Warner (now WarnerMedia).
- 2Net income attributable to AT&T decreased by 27.7% to $3.71 billion for the quarter and 20.3% to $7.81 billion for the six months, largely impacted by increased interest expenses and significant actuarial losses on pension and postretirement benefits.
- 3The Communications segment's revenue remained stable year-over-year for the quarter and saw a slight decrease for the six months, with Mobility showing positive growth in service revenue and ARPU.
- 4WarnerMedia segment revenue surged due to its inclusion for the full periods in 2019 compared to a partial period in 2018, showing significant contributions from Turner, Home Box Office, and Warner Bros.
- 5Latin America segment revenues declined by 9.9% for the quarter and 12.6% for the six months, largely due to foreign exchange pressures, particularly in Argentina.
- 6Cash provided by operating activities increased significantly to $25.34 billion for the six months, up from $19.18 billion in the prior year, driven by contributions from WarnerMedia and improved working capital management.
- 7AT&T adopted new lease accounting standards (ASC 842) as of January 1, 2019, resulting in the recognition of operating lease liabilities and right-of-use assets on the balance sheet.