AT&T Inc (T) Q3 2024 Earnings Call Highlights: Navigating Challenges with Strong Mobility ...

GuruFocus News
4 min read

In This Article:

  • Revenue: Slight decline due to lower business wireline service revenues and mobility equipment revenues, offset by growth in wireless service and fiber revenues.

  • Adjusted EBITDA: Increased by 3.4% year-over-year, driven by growth in mobility, consumer wireline, and Mexico.

  • Adjusted EPS: $0.60, down from $0.64 in the previous year.

  • Free Cash Flow: $5.1 billion for the quarter, with year-to-date free cash flow at $12.8 billion.

  • Capital Investment: $5.5 billion for the quarter, with capital expenditures at $5.3 billion.

  • Mobility Service Revenue: Grew by 4% year-over-year.

  • Postpaid Phone Net Adds: 403,000 for the quarter.

  • Postpaid Phone Churn: 0.8%, a slight improvement from 0.79% in the previous year.

  • Fiber Revenue Growth: Nearly 17% year-over-year.

  • Consumer Wireline EBITDA Growth: More than 8% for the quarter.

  • Business Wireline EBITDA Decline: Down 20% due to declines in legacy voice services.

  • Net Debt Reduction: Reduced by approximately $1.1 billion in the quarter.

  • Net Debt to Adjusted EBITDA: 2.8 times at the end of September.

Release Date: October 23, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • AT&T Inc (NYSE:T) reported strong growth in its mobility business, with a 6% increase in EBITDA, positioning it well for the fourth quarter.

  • The company added 403,000 postpaid phone net adds in the third quarter, demonstrating solid subscriber growth.

  • AT&T Inc (NYSE:T) achieved positive total broadband subscriber net adds for the fifth consecutive quarter, despite challenges such as a work stoppage and hurricanes.

  • The company continues to lead in fiber, with more than 200,000 AT&T Fiber net adds for 19 consecutive quarters, driven by strong customer demand.

  • AT&T Inc (NYSE:T) is successfully reducing its net debt and increasing operating leverage, with a target to achieve a net debt to adjusted EBITDA ratio in the 2.5 times range by the first half of next year.

Negative Points

  • Revenues were slightly down due to declines in business wireline service revenues and low-margin mobility equipment revenues.

  • The business wireline segment continues to face challenges, with a 20% decline in EBITDA due to secular declines in legacy voice services.

  • Adjusted EPS decreased to $0.60 from $0.64 in the year-ago quarter, impacted by various headwinds.

  • The company faced a $4.4 billion noncash goodwill impairment charge for its business wireline unit.

  • AT&T Inc (NYSE:T) anticipates higher capital investment in the fourth quarter, which may impact free cash flow.

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