10-QPeriod: Q1 FY2021

AT&T INC. Quarterly Report for Q1 Ended Mar 31, 2021

Filed May 6, 2021For Securities:TT-PCTBBT-PA

Summary

AT&T Inc. reported strong revenue growth of 2.7% to $43.9 billion for the first quarter of 2021, compared to the same period in 2020. This growth was primarily driven by increased equipment sales in the Communications segment and higher subscription and advertising revenues in the WarnerMedia segment. The company's net income attributable to common stock saw a significant increase of 63.8% to $7.5 billion, leading to a diluted earnings per share of $1.04, up from $0.63 in the prior year. Key strategic moves include a significant investment in C-Band spectrum licenses for $23.4 billion to enhance its 5G network capabilities. Concurrently, AT&T is progressing with the divestiture of its Video business through a new joint venture, DIRECTV, expected to close in the second half of 2021, which is anticipated to reduce debt. Despite increased operating expenses, the company demonstrated improved operating income and a robust cash flow from operations, reflecting effective cost management and operational execution.

Financial Highlights

47 data points
Beta

Revenue

$35.88B

Net Income

$7.55B

21.0% Net Margin

EPS (Diluted)

$1.02

Total Assets

$546.99B

Cash & Equivalents

$11.34B

Free Cash Flow

$9.93B

Financial Statements
Beta
Revenue$35.88B
SG&A Expenses$9.38B
Operating Expenses$36.28B
Operating Income$7.19B
Interest Expense$1.87B
Net Income$7.55B
EPS (Basic)$1.04
EPS (Diluted)$1.02
Shares Outstanding (Basic)7.16B
Shares Outstanding (Diluted)7.48B

Key Highlights

  • 1Total operating revenues increased by 2.7% to $43.9 billion, driven by equipment sales and WarnerMedia's subscription/advertising growth.
  • 2Net income attributable to common stock surged by 63.8% to $7.5 billion, resulting in diluted EPS of $1.04.
  • 3Significant investment in C-Band spectrum licenses totaling $23.4 billion to bolster 5G network capabilities.
  • 4Agreement to form a new DIRECTV joint venture (contributing the Video business) expected to close in H2 2021, aiming to reduce debt.
  • 5Operating income increased by 2.3% to $7.66 billion, despite a rise in operations and support expenses.
  • 6Net cash provided by operating activities increased by 11.9% to $9.9 billion, demonstrating strong operational cash generation.
  • 7The Communications segment's revenue grew by 5.2%, largely propelled by a 9.4% increase in the Mobility business unit.

Frequently Asked Questions

AT&T's total operating revenues increased by 2.7% to $43.9 billion in the first quarter of 2021, compared to $42.8 billion in the same period of 2020. This growth was primarily fueled by higher equipment sales in the Communications segment and increased subscription and advertising revenues within the WarnerMedia segment.

The company made a substantial investment of $23.4 billion in C-Band spectrum licenses to enhance its 5G network. Additionally, AT&T is progressing with the separation of its Video business into a new joint venture, DIRECTV, which is expected to close in the second half of 2021 and will help in reducing the company's debt.

Profitability saw a significant improvement. Net income attributable to common stock increased by 63.8% to $7.5 billion, resulting in diluted earnings per share of $1.04, up from $0.63 in the prior year. Operating income also grew by 2.3% to $7.66 billion.

AT&T has classified its Video business as held-for-sale and expects to receive approximately $7.6 billion in cash at closing of the DIRECTV joint venture transaction. This is anticipated to significantly reduce the company's total and net debt positions.