AT&T enhances revenue guidance expecting 5G boom

AT&T has reported 7.6 percent increase in total revenues to $44 billion in the second quarter of 2021 versus $41 billion in the year-ago quarter.
AT&T Q2 2021Higher WarnerMedia, Mobility, Mexico, and Consumer Wireline revenues more than offset declines in domestic video and Business Wireline. Total revenues were impacted by divestitures of previously held-for-sale businesses, including the fourth-quarter 2020 sale of wireless and wireline operations in Puerto Rico and the U.S. Virgin Islands.

Operating expenses of AT&T were $40.8 billion versus $37.4 billion in the year-ago quarter. Expenses increased due to $4.6 billion in impairments at Vrio compared to $2.2 billion in the prior year, domestic wireless equipment costs, sports-related programming costs, and higher direct-to-consumer programming and marketing costs.

Operating income was $3.3 billion versus $3.5 billion in the year-ago quarter. Second-quarter net income was $1.5 billion versus $1.2 billion.

AT&T’s Mobility revenues rose 10.4 percent to $18.9 billion due to higher equipment and service revenues. Service revenues grew 5 percent to $14.3 billion due to subscriber gains and the lapping of COVID-19 impacts on international roaming revenues and waived fees. Equipment revenues rose 31.9 percent to $4.6 billion, driven by smartphone sales and a mix of higher priced postpaid smartphones and higher sales of postpaid data devices.

AT&T added 789,000 new postpaid phone subscribers during the quarter. The wireless carrier had lost 151,000 subscribers in the year-ago quarter.

AT&T said postpaid churn was 0.87 percent versus 1.05 percent in the year-ago quarter and postpaid phone churn was 0.69 percent vs 0.84 percent in the year-ago quarter. Prepaid churn was a record low of less than 3 percent.

Postpaid phone-only ARPU was $54.24, down 0.4 percent versus the year-ago quarter, mostly due to the impacts of promotional discount amortization, but were up sequentially.

AT&T’s Business Wireline revenues fell 4 percent to $6.1 billion, primarily due to lower demand for legacy voice and data services in the current year and higher demand for pandemic-related connectivity in the prior-year.

More than 650,000 U.S. business buildings are lit with fiber from AT&T, enabling high-speed fiber connections to more than 2.5 million U.S. business customer locations. Nationwide, more than 9.0 million business customer locations are on or within 1,000 feet of our fiber.10

AT&T’s Consumer Wireline revenues increased 2.9 percent to $3.1 billion, due to gains in broadband though it faced declines in legacy voice and data services and other services. Broadband revenues increased 8.3 percent, which reflects fiber subscriber growth and higher ARPU resulting from increases in fiber customers and pricing.

Broadband and DSL subscriber net adds were 28,000, reflecting growth in fiber subscribers offsetting losses in slower-speed services. AT&T Fiber net adds were 246,000. AT&T Fiber is marketed to nearly 15 million customer locations.

AT&T Latin America revenues increased 16.6 percent to $1.4 billion, due to growth in Mexico. AT&T’s Mexico revenues rose 43.3 percent to $688 million, due to increased growth in equipment and service revenues.

AT&T has revised its financial guidance expecting total revenue growth in the 2 percent to 3 percent range. AT&T said gross capital investment will be in the $22 billion range, with capital expenditures in the $17 billion range in 2021. AT&T did not reveal any information on its 5G business growth.