5G, fiber continue to drive the telco’s results in Q1
AT&T beat expectations on its customer growth, with revenues off just slightly from the same period last year as CEO John Stankey continued to emphasize the telco’s focus on consistent, profitable growth driven by 5G and fiber.
Consolidated company revenues were $30 billion for the first quarter of 2024, compared to $30.1 billion in the year-ago period. CFO Pascal Desroches said that was due to a decline in “low margin mobility equipment revenues and business wireline revenues” which offset growth in high-margin wireless service revenues and fiber revenues. The higher-margin is where AT&T has made clear that its focus is, with Stankey saying on the quarterly call: “We’re growing the right way by adding valuable long-term wireless and broadband subscribers.”
Net income for the quarter was $3.8 billion, down from $4.5 billion in the year-ago quarter. AT&T said that it was impacted by higher depreciation, higher non-cash post-retirement benefit costs, lower capitalized interest,and lower equity income from DirecTV; Desroches said that DirecTV distributions in the quarter were $500 million, down from $1.3 billion a year ago. That figure will continue to decline by about 20% annually, he added. (AT&T separated DirecTV’s operations from the rest of the company in 2021 and signed an agreement for TPG to operate the new pay-TV company.)
Mobility service revenues were up 3.3% year-over-year to $16 billion. Consumer broadband revenues jumped 7.7% from the same time last year, to $2.7 billion in the first quarter of 2024. Those are in-line with AT&T’s expectations for its full-year results, which the company reiterated based on its Q1 performance: Wireless service revenue growth in the 3% range, and broadband growth in the 7% range.
“Our results this quarter reflect continued strong growth in our Mobility and Consumer Wireline connectivity businesses, which represent about 80% of our total revenues,” said Stankey. “Customers are choosing AT&T and staying with us. We achieved a record-low first-quarter postpaid phone churn, grew consumer broadband subscribers for the third consecutive quarter, and expanded margins in Mobility and Consumer Wireline.”
He added: “This consistent, solid performance driven by our investment-led strategy gives us confidence to re-affirm our full-year consolidated financial guidance.”
The company added 349,000 postpaid phone net adds, in addition to 252,000 net fiber additions. AT&T also said that it now has a Fixed Wireless Access consumer customer base of 200,000, having added 110,000 new subscribers to its AT&T InternetAir service during the first quarter. Desroches said on the quarterly call that the telco is also “pleased with early demand for AT&T Internet Air for business,” which is expected to benefit AT&T in the second half of the year.
Stankey called fiber AT&T’s “fastest growing engine”; AT&T said that it now passes 27.1 million consumer and business locations with its fiber network, and it is on track to pass 30 million locations by the end of 2025.
