Citing higher Mobility, Mexico and Consumer Wireline revenues, partly offset by lower Business Wireline revenues, AT&T reported Q3 evenues of $30.4 billion, up 1% year over year. Operating income was $5.8 billion versus $6.0 billion in the year-ago quarter. When adjusting for certain items, adjusted operating income* was $6.5 billion versus $6.2 billion in the year-ago quarter.
Capital expenditures were $4.6 billion in the quarter versus $5.9 billion in the year-ago quarter. Capital investment, which includes $1.0 billion of cash payments for vendor financing, totaled $5.6 billion.
“Our investments in best-in-class 5G and fiber connectivity are fueling our growth engine. We’re gaining profitable customer relationships and becoming more efficient. This is powering our strong business performance and gives us the confidence to raise our full-year free cash flow guidance,” said John Stankey, AT&T CEO. “We are pleased that customers are choosing AT&T and staying with us over the long run as we connect and simplify their digital world.”
Highlights
Mobility
Revenues were up 2.0% year over year to $20.7 billion due to higher service revenues. Service revenues were $15.9 billion, up 3.7% year over year, primarily driven by subscriber and postpaid phone ARPU growth. Equipment revenues were $4.8 billion, down 3.2% year over year due to lower device volumes.
Total wireless net adds were 6.6 million, including:
- 550,000 postpaid net adds with:
- 468,000 postpaid phone net adds
- (48,000) postpaid tablet and other branded computing device net losses
- 130,000 other net adds
- 26,000 prepaid phone net adds
- Postpaid churn improved to 0.95% versus 1.01% in the year-ago quarter.
- Postpaid phone churn improved to 0.79% versus 0.84% in the year-ago quarter.
- Prepaid churn was 2.78%, with Cricket substantially lower, versus 2.83% in the year-ago quarter.
- Postpaid phone ARPU was $55.99, up 0.6% versus the year-ago quarter, due to pricing actions, higher international roaming and a mix shift to higher-priced unlimited plans.
- FirstNet connections reached about 5.3 million across nearly 27,000 agencies. FirstNet is the nationwide communications platform dedicated to public safety. The AT&T and FirstNet networks cover more than 99% of the U.S. population, and FirstNet covers more first responders than any other network in America.
Business Wireline
- Revenues were $5.2 billion, down 7.9% year over year due to lower demand for legacy voice and data services and product simplification, partly offset by growth in connectivity services. This quarter also included approximately $100 million in revenues from intellectual property sales, which were relatively consistent with the prior year.
- AT&T Business serves the largest global companies, government agencies and small businesses. More than 800,000 U.S. business buildings are lit with fiber from AT&T, enabling high-speed fiber connections to approximately 3.3 million U.S. business customer locations. Nationwide, more than 10 million business customer locations are on or within 1,000 feet of our fiber.3
Consumer Wireline
- Revenues were $3.3 billion, up 4.6% year over year due to gains in broadband more than offsetting declines in legacy voice and data and other services. Broadband revenues increased 9.8% due to fiber growth of 26.9%, partly offset by a 9.0% decline in non-fiber revenues. The company now expects full-year broadband revenue growth of 7%+, versus prior guidance of 5%+.
- Total broadband net gains, excluding DSL and including AT&T Internet Air, were 15,000, reflecting AT&T Fiber net adds of 296,000, more than offsetting losses in non-fiber services. AT&T Fiber is now capable of serving 20.7 million customer locations and offers symmetrical, multi-gig speeds across parts of its entire footprint of more than 100 metro areas.
Latin America – Mexico Operational Highlights
- Revenues were $992 million, up 26.4% year over year due to growth in both service and equipment revenues. Service revenues were $672 million, up 20.2% year over year, driven by favorable foreign exchange and essentially stable subscriber and wholesale revenues. Equipment revenues were $320 million, up 41.6% year over year due to higher sales and favorable foreign exchange.
- Operating loss was ($29) million compared to ($63) million in the year-ago quarter. EBITDA* was $155 million compared to $101 million in the year-ago quarter.
- Total wireless net adds were 65,000, including 17,000 prepaid net adds, 55,000 postpaid net adds and 7,000 reseller net losses.
