8-KOther EventsExhibits & Filings

AT&T INC. 8-K Report, Corporate Update (Jul 24, 2013)

Filed July 24, 2013For Securities:TT-PCTBBT-PA

Summary

AT&T Inc. reported its second-quarter 2013 financial and operational results, indicating a slight increase in overall revenue driven primarily by strong performance in its Wireless segment, specifically from increased data and equipment sales. While net income saw a marginal year-over-year decrease, earnings per share improved due to a higher share count in the prior year. The company continued to expand its wireless subscriber base, with significant growth in postpaid subscribers and a notable increase in smartphone adoption and data plan usage among its customer base. The Wireline segment experienced a revenue decline, largely attributed to legacy voice services and directory revenue loss, although this was partially offset by growth in IP-based data and video services, particularly the U-verse offerings. Despite revenue pressures in wireline, AT&T demonstrated a commitment to shareholder returns by repurchasing a substantial number of shares during the quarter and continuing its buyback program. The company remains focused on evolving its service offerings to capitalize on data-driven growth while managing declines in traditional voice services.

Key Highlights

  • 1Second-quarter 2013 net income was $3.8 billion ($0.71 per diluted share), compared to $3.9 billion ($0.66 per diluted share) in Q2 2012.
  • 2Total revenues for Q2 2013 reached $32.1 billion, a 1.6% increase year-over-year, driven by wireless data and equipment.
  • 3Wireless segment revenues grew 5.7% to $17.3 billion, fueled by net subscriber adds and strong data revenue growth.
  • 4The company added 632,000 net wireless subscribers in Q2 2013, bringing the total customer base to approximately 107.9 million.
  • 5Postpaid churn slightly increased to 1.02% from 0.97% in the prior year's quarter.
  • 6Wireline segment revenues decreased by 0.9% to $14.8 billion, with declines in legacy voice services outweighing IP-based data and video growth.
  • 7AT&T repurchased approximately 89 million shares for $3.3 billion in Q2 2013 and continued its stock repurchase program.

Frequently Asked Questions

AT&T reported a slight increase in total revenues to $32.1 billion in Q2 2013, up 1.6% from the prior year. Net income was $3.8 billion, a marginal decrease from $3.9 billion in Q2 2012, but earnings per diluted share improved to $0.71 from $0.66 due to a higher share count in the previous year. Operating income and margin saw a decrease year-over-year.

The Wireless segment was a key growth driver, with revenues increasing by 5.7% to $17.3 billion. This growth was primarily attributed to an increase in net subscribers, strong growth in data revenues, and continued high sales of smartphones and tablets. The company added 632,000 net wireless subscribers, bringing its total to nearly 108 million.

The Wireline segment experienced a slight revenue decrease of 0.9% to $14.8 billion. Declines in legacy circuit-based data services and voice services, as well as the loss of directory revenues from a prior segment sale, impacted performance. However, this was partially offset by growth in IP-based data services and U-verse video and broadband revenues. U-verse subscriber numbers continue to grow.

AT&T demonstrated its commitment to returning capital to shareholders by repurchasing approximately 89 million shares for $3.3 billion during the second quarter of 2013. The company completed its second share repurchase authorization and began its third, indicating an ongoing strategy of opportunistic stock buybacks.