AT&T Q4 2021 Earnings Report Recap

T beat estimates on earnings and revenue

Key Takeaways

  • New mobile subscriptions surpassed analyst expectations.
  • When new mobile subscriptions are positive for a period, it means that AT&T is adding more postpaid mobile subscriptions than are being terminated.
  • AT&T reported a significant decline in revenue for the quarter, reflecting the impact of major divestments it has made over the past year.
AT&T Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
Adjusted EPS Beat $0.78 $0.76
Revenue Beat $41.0B $40.4B
New Mobile Subscriptions Beat 1,285,000 1,115,500

Source: Predictions based on analysts' consensus from Visible Alpha

AT&T (T) Financial Results: Analysis

AT&T Inc. (T) reported Q4 FY 2021 earnings that beat analyst expectations. Adjusted earnings per share (EPS) were up 4.0% year over year (YOY), coming in above consensus estimates. Revenue also exceeded expectations but declined 10.3% YOY. AT&T surpassed analyst predictions for new mobile subscriptions. The company's shares rose slightly in pre-market trading following the earnings release. Over the past year, AT&T's stock has provided a total return of -2.0%, below the S&P 500's total return of 13.0%.

AT&T New Mobile Subscriptions

AT&T reported new mobile subscriptions of 1,285,000, the most quarterly net additions the company has reported in at least the past 15 quarters. The company calls new mobile subscriptions "postpaid net additions." This key metric is also referred to as "postpaid wireless net adds." Postpaid subscriptions differ from prepaid subscriptions in that payments are made at the end of a period based on usage. This key metric reflects the net difference between the number of new postpaid wireless subscriptions and the number of subscriptions that were terminated. In addition to phone subscriptions, the metric also includes subscriptions for tablets, wearables, and other mobile devices.

Mobile subscriptions will become increasingly important to AT&T when it completes the spinoff of its WarnerMedia unit and exits the entertainment business. The company announced the spinoff in May 2021. The move is part of a larger overhaul and pruning of the company's operations in order to focus on its core wireless and broadband communications. Over the past year, AT&T has divested several of its major businesses, including pay TV, media production, and advertising. The company said that its revenue decline for the quarter reflected the impact of these divestments.

The majority of AT&T's new mobile subscriptions were for postpaid phone subscriptions. Postpaid phone net adds came in at 884,000 and 3.2 million for the full year. The company noted in its earnings press release that it gained more postpaid phone subscribers over the past year than in the previous ten years combined.

AT&T 2022 Outlook

AT&T said that it expects its full-year FY 2022 revenue growth to be in the low-single digits. It expects its adjusted EPS for the year to be between $3.10 and $3.15. Adjusted EPS for full-year FY 2021 came in at $3.40.

AT&T Earnings Call Recap

In an earnings call after results were released, Chief Financial Officer (CFO) Pascal Desroches said the company feels good about the trajectory of the wireless business and sees mobile “normalizing” lower after the boom in 2021. The company, however, did not give a specific forecast for its wireless business.

AT&T's next earnings report (for Q1 FY 2022) is expected to be released on April 27, 2022.

Article Sources
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