AT&T Beats Expectations with $32.3 Billion Q4 Revenue

AT&T Inc. (NYSE: T) concluded the fourth quarter of 2024 with notable achievements across several metrics. The company reported revenues of $32.3 billion, marking a slight increase of 0.9% compared to the same period last year. This growth was attributed to a rise in Mobility service and equipment revenues, as well as Consumer Wireline revenues, although it was partially offset by declines in Business Wireline and Mexico operations.

AT&T Reports Better than Expected Results for Q4 2024

The company’s diluted earnings per share (EPS) stood at $0.56, with an adjusted EPS of $0.54. Operating income was reported at $5.3 billion, with an adjusted figure of $5.4 billion. Net income amounted to $4.4 billion, while adjusted EBITDA was $10.8 billion. Cash from operating activities increased to $11.9 billion, up $0.5 billion year over year.

However, free cash flow decreased to $4.8 billion, a drop of $1.5 billion compared to the previous year, as AT&T worked towards a more balanced quarterly free cash flow pattern.

The company added 482,000 postpaid phone net subscribers, achieving an industry-leading postpaid phone churn rate of 0.85%. Mobility service revenues grew by 3.3% year over year to $16.6 billion. Additionally, AT&T Fiber added 307,000 net subscribers, marking the 20th consecutive quarter with over 200,000 net adds. Consumer broadband revenues also increased by 7.8% year over year, reaching $2.9 billion.

AT&T’s fourth-quarter results surpassed market expectations in terms of both EPS and revenues. Analysts had projected an EPS of $0.4937, but the company delivered an adjusted EPS of $0.54. Similarly, revenue expectations were set at $32.07 billion, yet AT&T reported a slightly higher figure of $32.3 billion.

The increase in Mobility service revenue, which grew by 3.3%, was a significant contributor to the company’s strong performance. This growth was driven by subscriber gains and an increase in postpaid phone average revenue per user (ARPU). The company also saw a 3.4% rise in Consumer Wireline revenues, supported by growth in broadband revenues, particularly from fiber services.

While Business Wireline revenues declined by 10.0% due to ongoing pressures on legacy voice and data services, the segment’s results were partially offset by growth in fiber and advanced connectivity services. Despite these challenges, AT&T’s overall performance in the fourth quarter demonstrated its ability to navigate market dynamics and deliver results that exceeded expectations.

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AT&T Expects Adjusted EBITDA Growth of 3% or Better Going Forward

AT&T has provided guidance that indicates continued growth across several key areas. The company expects consolidated service revenue growth in the low-single-digit range, with Mobility service revenue growth projected at the higher end of the 2% to 3% range. Consumer fiber broadband revenue is anticipated to grow in the mid-teens.

AT&T also forecasts adjusted EBITDA growth of 3% or better, with Mobility EBITDA growth expected at the higher end of the 3% to 4% range. However, Business Wireline EBITDA is projected to decline in the mid-teens range, while Consumer Wireline EBITDA is expected to grow in the high-single to low-double-digit range. Capital investment for the year is anticipated to be around $22 billion.

The company plans to achieve a net-debt-to-adjusted EBITDA ratio in the 2.5x range in the first half of 2025. Additionally, AT&T continues to expect the sale of its 70% stake in DIRECTV to TPG to close in mid-2025. This transaction is expected to impact the company’s financials, as it plans to exclude equity in net income from DIRECTV from its adjusted EPS going forward.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.