AT&T Q4 Adj. EPS Miss View; Sees FY24 Adj. Earnings Below Market; Stock Down

(RTTNews) - Telecom giant AT&T, Inc. reported Wednesday a profit in its fourth quarter, compared to prior year's hefty loss, benefited by sharply lower charges as well as profitable 5G and AT&T Fiber subscriber gains. Adjusted earnings per share, meanwhile, missed market estimates.

Further, the company issued fiscal 2024 adjusted earnings view below the Street estimates. In 2025, the company expects to deliver adjusted earnings per share growth.

In pre-market activity on the NYSE, AT&T shares were losing more than 4 percent.

John Stankey, AT&T CEO, said, "We accomplished exactly what we said we would in 2023, delivering sustainable growth and consistent business performance, resulting in full-year free cash flow of $16.8 billion, ahead of our raised guidance. As we advance our lead in converged connectivity, we will continue to scale our best-in-class 5G and fiber networks to meet customers' growing demand for seamless, ubiquitous broadband...."

For the full year 2024, AT&T expects adjusted earnings per share of $2.15 to $2.25. Analysts on average expect the company to report earnings of $2.46 per share, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

For the full year, the company projects wireless service revenue growth in the 3 percent range, Broadband revenue growth of 7 percent+, and adjusted EBITDA growth in the 3 percent range.

Capital investment is expected in the $21 billion to $22 billion range and free cash flow is estimated in the $17 billion to $18 billion range.

In fiscal 2023, earnings per share from continuing operations was $1.97 and adjusted earnings per share was $2.41 on revenues of $122.4 billion.

For the fourth quarter, net income attributable to common stock was $2.14 billion, compared to last year's loss of $23.57 billion. Earnings per share were $0.30, compared to prior year's hefty loss of $3.20.

The latest results included charges of $0.24 per share, mainly from an actuarial loss on benefit plans, and restructuring and impairments.

In the prior year, the result was hit by charges of $3.57 impairments, abandonments and restructuring, and $0.19 actuarial loss on benefit plans, among others.

Adjusted earnings per share from continuing operations was $0.54, compared to $0.61 in the year-ago quarter. Analysts expected the company to report earnings of $0.56 per share.

Total operating revenues grew 2.2 percent to $32.02 billion from last year's $31.34 billion. The Street was looking for revenues of $31.48 billion for the quarter.

The revenue growth in the quarter primarily reflected higher Mobility, as well as Mexico and Consumer Wireline revenues. These were partly offset by continued declines in Business Wireline revenues.

Communications Operational revenues were $30.8 billion, up 1.4 percent due to increases in Mobility and Consumer Wireline.

Mobility revenues grew 4.1 percent due to both higher service and equipment revenues.

Total wireless net adds were 5.9 million.

Business Wireline revenues, meanwhile, fell 10.3 percent year over year due to lower demand for legacy voice and data services and product simplification, partly offset by growth in connectivity services.

Consumer Wireline revenues grew 3.8 percent due to gains in broadband.

Latin America - Mexico Operational revenues were up 26.6 percent primarily due to growth in both service and equipment revenues.

The company said it expanded the most reliable 5G network, and mid-band 5G spectrum now covers 210 million+ people, achieving end-of-year target.

The company recorded 273,000 AT&T Fiber net adds in the fourth quarter, and 1.1 million net adds for full-year 2023.

In pre-market activity on the NYSE, the shares were trading at $16.50, down 4 percent.

For more earnings news, earnings calendar, and earnings for stocks, visit rttnews.com.