AT&T Wins Big in Q4 With Earnings and Tax Reform

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AT&T Inc. (NYSE: T) released its fourth quarter earnings report after markets closed Wednesday. The company posted $0.78 in earnings per share (EPS) on $41.68 billion in revenue versus consensus estimates from Thomson Reuters that called for $0.65 in EPS and $41.19 billion in revenue. The same period from last year had $0.66 in EPS and $41.84 billion in revenue.

Fourth-quarter net income attributable to AT&T was $19.0 billion, or $3.08 per diluted share, and reflects the impact of the Tax Cuts and Jobs Act, compared to $2.4 billion, or $0.39 per diluted share, in the year-ago quarter.

During this quarter, cash from operating activities was $9.9 billion and capital expenditures were $5.1 billion. Free cash flow totaled $4.8 billion for the quarter.

The telecom giant reported its segments as:

  • Business Solutions Segment had total operating revenues of $18.39 billion.
  • Entertainment Group Segment had total operating revenues of $12.75 billion.
  • Consumer Mobility Segment had total operating revenues of $8.27 billion.
  • International Segment had total operating revenues of $2.22 billion.

In terms of the outlook for 2018, AT&T expects to see EPS of $3.50, with free cash flow of about $21 billion, and capital expenditures approaching $25 billion. There are consensus estimates calling for $0.78 in EPS and $39.69 billion in revenue.

Randall Stephenson, AT&T Chairman and CEO, commented:

The impact of tax reform and regulatory rationalization will be substantial and positive for the U.S. economy and AT&T. Our FirstNet win and the opt-in by 100 percent of all states and territories will enable us to put the industry’s most robust spectrum assets to work in building a best-in-class nationwide network for public safety and first responders. On the Time Warner front, we look forward to presenting our case in court and closing the deal.

Shares of AT&T closed Wednesday at $37.45, with a consensus analyst price target of $39.81 and a 52-week range of $32.55 to $42.70. Following the announcement, the stock was up about 3% at $38.60 in the after-hours trading session.