AT&T beats by $0.03, reports revs in-line; guides FY14 revs above consensus
Reports Q4 (Dec) earnings of $0.53 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus Estimate of $0.50; revenues rose 1.8% year/year to $33.16 bln vs the $33.09 bln consensus.
Co issues upside guidance for FY14, sees FY14 revs of +2-3% rev growth calc to ~$131.3-132.6 bln vs. $131.09 bln Capital IQ Consensus Estimate.
Total wireless revenues, which include equipment sales, were up 4.5 percent year over year to $18.4 billion. Wireless service revenues increased 4.8 percent in the fourth quarter to $15.7 billion. Wireless data revenues increased 16.8 percent from the year-earlier quarter to $5.7 billion.
AT&T posted a net increase in total wireless subscribers of 809,000 in the fourth quarter. Subscriber additions for the quarter included postpaid net adds of 566,000. Postpaid net adds include 299,000 smartphones. Total branded smartphone net adds (both postpaid and prepaid) were 529,000. Total branded tablet net adds were 440,000.
AT&T added 1.2 million postpaid smartphones in the fourth quarter. At the end of the quarter, 77 percent, or 51.9 million, of AT&T's postpaid phone subscribers had smartphones, up from 70 percent, or 47.1 million, a year earlier.
Total U-verse subscribers (TV and high speed Internet) reached 10.7 million in the fourth quarter. U-verse TV had the lowest-ever churn in its history.
AT&T's fourth-quarter wireless operating income margin was 21.4 percent versus 14.5 percent in the year-earlier quarter.
Outlook: AT&T is on track to deliver the financial targets laid out with Project VIP. It expects solid revenue and earnings per share growth with stable margins while returning substantial value to shareowners. In 2014, AT&T expects continued consolidated revenue growth in the 2 to 3 percent range, including strength in wireless service and wireline consumer revenues. The company also expects stable consolidated margins with continued improvement in wireless margins helping offset Project VIP pressure in wireline. Adjusted earnings per share growth is expected to be in the mid-single digit range excluding any impact from future share buybacks. AT&T expects capital expenditures in the $21 billion range. Free cash flow is expected to be in the $11 billion range.