AT&T feels ‘great’ about Q3, says 5G and fiber remain focus

Consolidated revenues were down 0.5% in Q3, but AT&T said this was offset by higher mobility service and consumer wireline revenues

AT&T reported consolidated revenues of $30.2 billion for the third quarter, down 0.5%, driven by lower business wireline service revenues and declines in mobility equipment revenues due to lower sales volumes. AT&T added, however, that these decreases were offset by higher mobility service and consumer wireline revenues. Overall, AT&T CEO John Stankey said the company feels “great” about this “consistent” performance, and that the strategy remains the same, with a focus on 5G and fiber.

AT&T reported wireless postpaid phone net additions of 403,000, with mobility service revenues up 4% year-over-year to $16.5 billion for the third quarter, as well as postpaid phone churn of 0.78%. “Three quarters of the way through the year our mobile business has grown EBTA by more than 6%, which is in the high end of the guidance we provided for the full year. This puts us in a solid position heading into the fourth quarter where we expect seasonably higher phone purchased activity, upgrades and promotional cycles,” Stankey told investors.

The company reported 226,000 fiber net adds, which means it has achieved more than 200,000 fiber net adds for 19 consecutive quarters. It also claimed consumer broadband revenues of $2.8 billion, up 6.4% year-over-year, and said that is has now passed 28.3 million consumer and business locations with fiber.

Net income was $0.1 billion versus $3.8 billion in the year-ago quarter.

Like last quarter, operating expenses were up year-on-year, coming in at $28.1 billion versus $24.6 billion in the year-ago quarter. Again, AT&T said this is due costs primarily related to its Open RAN network modernization focus as well as higher depreciation on its fiber and 5G investments but added that faster-than-previously anticipated industry-wide secular decline of legacy services was also to blame here.

Stankey noted that these overall strong quarter results were achieved despite severe weather and a work stoppage in the Southeast. Of the worker strikes, which took place over the past few months in the Southeast and in the West, he commented further: “We are pleased to welcome our committed employees in the Southeast back to work on September 16^th. With a newly ratified agreement, a 5-year contact in the Southeast and a similar 4-year agreement in the West, we appropriately recognized our employees for the exceptional service and performance they provide our customers,” he said.