People/Biz

AT&T meets revenue goals in first full quarter since WarnerMedia merger

AT&T boasted solid revenue, earnings and free cash flow growth while missing profit estimates in the third quarter, the company’s first full quarter since acquiring New York-headquartered mass media conglomerate WarnerMedia, ...
October 24, 2018

AT&T boasted solid revenue, earnings and free cash flow growth while missing profit estimates in the third quarter, the company’s first full quarter since acquiring New York-headquartered mass media conglomerate WarnerMedia, formerly Time Warner.

The company unveiled consolidated revenue of US$45.7 billion; cash from operations of $12.3 billion, up 14.3%; capital expenditures of $5.9 billion; and free cash flow of $6.5 billion, up 16.6% in their quarterly earnings report.

Adjusted earnings per share were at $0.90, up 22% from last year but lower than predicted and down $0.01 from last quarter.

Operating expenses were up from last year, at $38.5 billion versus $33.9 billion, primarily due to the WarnerMedia acquisition, the company said in the report. The acquisition also led to higher operating expenses of $39.9 billion, up $6.1 billion from last year.

Operating income, meanwhile, hit $7.3 billion, up 25.2% from the same period last year, again due to the WarnerMedia acquisition.

WarnerMedia itself also saw some gains year-over-year, with revenue up 7% at $8.2 billion, with Warner Bros. accounting for $3.7 billion, with strong licensing revenue growth from scripted projects including Crazy Rich Asians, The Meg and The Nun.

Communications revenue gains in Mobility were offset by declines in the Entertainment Group and Business Wireline, representing total revenues of $36.2 billion, down 2.4% from the previous year.

On the TV side, business went down, with a 346,000 net loss in DirectTV satellite and AT&T Uverse video customers. The DirectTV Now internet TV service, meanwhile, saw an increase of 49,000 customers.

“I’m pleased with the progress we made on a number of fronts in the third quarter,” said Randall Stephenson (pictured), AT&T chairman and CEO, in a statement. “Our U.S. wireless business is growing and it’s the single biggest contributor to our earnings and cash flow. WarnerMedia was immediately accretive in its first full quarter, contributing 5 cents to EPS, and our free cash flow grew by double digits.

“We’ve accomplished all this while staying focused on managing our debt portfolio. We’re on track to get to the 2.5x debt-to-EBITDA range by year-end 2019. And as we’re nearing completion of our fiber build and making pricing moves on video, we’re laying the foundation for stabilizing our Entertainment Group profitability in 2019. Across the business, I like our momentum and feel confident that we’re on track to deliver on our plans.”

About The Author
Senior staff writer Frederick Blichert comes to realscreen with a background as a journalist and freelance film critic. He has previously written for VICE, Paste Magazine, Senses of Cinema, Xtra, Canadian Cinematographer and elsewhere. He holds a Master of Arts in film studies from Carleton University and a Master of Journalism from the University of British Columbia.

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