10-QPeriod: Q1 FY2020

AT&T INC. Quarterly Report for Q1 Ended Mar 31, 2020

Filed May 6, 2020For Securities:TT-PCTBBT-PA

Summary

AT&T Inc. reported its first-quarter 2020 results, showing a decrease in total operating revenues to $42.8 billion from $44.8 billion in the prior year quarter. This decline was primarily driven by lower revenues in the WarnerMedia and Communications segments, influenced by factors such as the cancellation of the NCAA tournament impacting advertising and a slowdown in wireless equipment sales due to store closures. Despite revenue headwinds, operating income saw a modest increase to $7.49 billion from $7.23 billion, with an improved operating income margin. The company highlighted the impact of the COVID-19 pandemic, which led to approximately $430 million in incremental costs related to bad debt, employee support, and production shutdowns. Due to the ongoing uncertainty, AT&T withdrew its previously issued financial guidance for the year. The company also reported a significant increase in net income attributable to common stock to $4.58 billion, or $0.63 per diluted share, compared to $4.10 billion, or $0.56 per diluted share, in the first quarter of 2019.

Financial Highlights

47 data points
Beta

Revenue

$42.78B

Net Income

$4.61B

10.8% Net Margin

EPS (Diluted)

$0.63

Total Assets

$545.35B

Cash & Equivalents

$10.04B

Free Cash Flow

$8.87B

Financial Statements
Beta
Revenue$42.78B
SG&A Expenses$8.76B
Operating Expenses$35.29B
Operating Income$7.49B
Interest Expense$2.02B
Net Income$4.61B
EPS (Basic)$0.63
EPS (Diluted)$0.63
Shares Outstanding (Basic)7.19B
Shares Outstanding (Diluted)7.21B

Key Highlights

  • 1Total operating revenues decreased by 4.6% to $42.8 billion year-over-year.
  • 2Operating income increased by 3.5% to $7.49 billion, indicating improved operational efficiency.
  • 3Diluted Earnings Per Share (EPS) rose to $0.63 from $0.56 in the prior year quarter.
  • 4The Communications segment showed resilience with a 2.4% increase in operating contribution, driven by Mobility growth.
  • 5WarnerMedia segment experienced a significant 25.8% decline in operating contribution due to impacts on advertising and content revenues.
  • 6COVID-19 related incremental costs amounted to approximately $430 million, impacting profitability.
  • 7The company withdrew its prior financial guidance for the full year due to pandemic-related uncertainties.

Frequently Asked Questions

AT&T's total operating revenues for the first quarter of 2020 were $42.779 billion, a decrease from $44.827 billion in the first quarter of 2019.

The COVID-19 pandemic resulted in approximately $430 million of incremental costs related to bad debt reserves, voluntary corporate actions for employees, and WarnerMedia production shutdowns. The company also noted impacts from event cancellations (like the NCAA tournament), retail store closures affecting equipment sales, and reduced wireless roaming services. Due to these uncertainties, AT&T withdrew its financial guidance.

Despite a decrease in overall revenues, AT&T's operating income increased by 3.5% to $7.49 billion, and Net Income Attributable to Common Stock rose by 11.8% to $4.58 billion. Diluted Earnings Per Share also improved to $0.63 from $0.56 in the prior year period.

The Communications segment showed a 2.4% increase in operating contribution, largely due to growth in the Mobility business. The WarnerMedia segment experienced a significant 25.8% decline in operating contribution due to lower advertising and content-related revenues. Latin America also saw a decrease in operating contribution.