Telecom & Wireless

AT&T Earnings Report Doesn't Measure Up to Expectations

Paul Ausick

Published: January 26, 2016 4:33 pm

Last Updated: January 13, 2020 2:33 pm

AT&T Inc. (NYSE: T) reported fourth-quarter and full-year 2015 results after markets closed on Tuesday. The telecom giant reported adjusted diluted quarterly earnings per share (EPS) of $0.63 on revenues of $42.1 billion. In the same period a year ago, the company reported EPS of $0.56 on revenues of $34.44 billion. Fourth-quarter results compare to the consensus estimates for EPS of $0.63 on revenues of $42.75 billion.

For the full year AT&T posted adjusted EPS of $2.71 and revenues of $146.8 billion compared with 2014 EPS of $2.56 and revenues of $132.45 billion. Analysts were looking for EPS of $2.71 and revenues of $148.13 billion.

On a GAAP basis, the company reported quarterly EPS of $0.65 and full-year EPS of $2.37.

Revenues rose by 22% year-over-year in the quarter, largely the result of the acquisition of DirecTV. Operating margin was up 230 basis points to 16.8% in the quarter.

In its fiscal 2016 outlook AT&T noted:

• Double-digit consolidated revenue growth
• Adjusted EPS growth in the mid-single digit range or better
• Stable consolidated margins with ramp in Mexico investment
• Capital spending in the $22 billion range
• Free cash flow growth with a dividend payout ratio3 in the 70s%

Wireline voice connections fell from a total of 22.8 million to 22.12 million quarter-over-quarter, and wireline broadband connections slipped from 15.83 million to 15.78 million.

CEO Randall Stephenson said:

We now have a unique set of capabilities that positions us for growth and also gives us a strategic advantage in providing consumers and businesses the integrated mobile, video and data solutions they want. Our DIRECTV integration is going well, and the customer response to our new integrated mobile and entertainment offers is strong. Throughout this year, we plan to launch a variety of new video entertainment packages that give customers even more choices.

We’re also seeing terrific results from our expansion into the Mexican mobile market. Our LTE network now covers 355 million people and businesses, and in the quarter we had 2.8 million wireless net additions

Shares closed the regular trading session Tuesday up 1.14% at $35.40 and traded down about 1.3% at $34.95 in after-hours trading. The stock’s 52-week range is $30.97 to $36.45. Prior to today’s release Thomson/Reuters had a consensus price target of $37.13 on the company’s shares.