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

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.

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.

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