AT&T Slips To Loss On Charges, But Adj. EPS Tops View

Telecom giant AT&T, Inc. (T) reported Wednesday a hefty loss for the fourth quarter compared to a profit last year, primarily hurt by impairments, abandonments and restructuring charges. Adjusted earnings per share topped analysts’ expectations, while quarterly revenues missed it by a whisker. The company also issued weak earnings guidance for the full year 2023.

“Our consistent go-to-market strategy and the simplicity of our offerings drove continued robust, high-quality wireless and fiber customer additions in the fourth quarter,” said John Stankey, AT&T CEO.

For the fourth quarter, net loss from continuing operations attributable to common stock was $23.57 billion or $3.20 per share, compared to $4.99 billion or $0.66 per share in the prior-year quarter.

Excluding other items, adjusted earnings from continuing operations was $0.61 per share, compared to $0.56 per share in the year-ago quarter.

AT&T’s operating revenues from continuing operations for the quarter edged up 0.8 percent to $31.34 billion from $31.10 billion in the same quarter last year, primarily reflecting higher Mobility, Mexico and Consumer Wireline revenues, partly offset by lower Business Wireline revenues.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $0.57 per share on revenues of $31.39 billion for the quarter. Analysts’ estimates typically exclude special items.

Operating revenues for the communications segment, consisting Mobility, Consumer Wireline and Business Wireline business units, edged up 0.5 percent to $30.4 billion from last year, due to increases in Mobility and Consumer Wireline, which more than offset a decline in Business Wireline.

Operating revenues for the Latin America segment, consisting of the Mexico business units and is subject to foreign currency fluctuations, were up 22.3 percent year-over-year to $861 billion, primarily due to growth in both service and equipment revenues, including favorable foreign exchange impacts.

Operating loss from continuing operations for the quarter was $21.1 billion, compared to operating income of 4.9 billion last year, due to non-cash asset impairments abandonments, and other items. Adjusted operating income from continuing operations was $5.7 billion, compared to $5.0 billion in the year-ago quarter.

Total operating expenses from continuing operations doubled to $52.4 billion from $26.2 billion in the year-ago quarter, primarily due to $26.8 billion of non-cash goodwill impairments and asset abandonments and restructuring charges.

This primarily included goodwill impairments of $24.8 billion associated with Business Wireline, Consumer Wireline and Mexico reporting units and were driven by higher interest rates consistent with the macroeconomic environment, with secular declines also impacting Business Wireline growth rates.

Looking ahead to fiscal 2023, the company now projects adjusted earnings in a range of $2.35 to $2.45 per share on wireless service revenue growth of 4 percent or higher and broadband revenue growth of 5 percent or higher.

The Street is looking for earnings of $2.56 per share on a revenue decline of 3.2 percent to $122.78 billion for the year.

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