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Bond Market News
AT&T Reports Earnings Decline and Cuts its FCF projections by $2bn
July 22, 2022
Telecom giant AT&T reported a 17.1% YoY fall in revenue to $29.6bn vs $35.7bn in Q2 of the previous year due to US video separation in Q3 2021 and certain other divested businesses. Net income declined 12.1% QoQ to $4.5bn or EPS of $0.59. During Q2, the mobility segment revenue was up 5.2% YoY to $19.9bn on higher wireless services and equipment revenues. Adjusted EBITDA came in at $10.3bn up 1.7% yearly. Notably, in the mobility segment for 5G wireless during Q2, AT&T added 813k postpaid phone net adds, the highest Q2 results in over a decade. As of June 2022, net debt was $131.9bn, reflecting the proceeds from the WarnerMedia transaction, with a net debt-to-adjusted EBITDA of 3.23x. For FY22, the company sees low single-digit revenue growth with Wireless Service Revenue at 4.5-5% growth. It also lowered FCF projections to a $14bn range accounting for $1.7bn higher capital investment YoY and an impact of approximately $1bn due to timing of customer collections. AT&T CEO John Stankey said, “The company has already added nearly 2mn AT&T Fiber locations this year and just reached the target of covering 70mn people with mid-band 5G spectrum two quarters early, with expectations to now approach the 100mn mark by the end of year.”
AT&T’s 4.9% 2037s dollar bonds were trading higher at 103.15, up over 3.95 points to yield 4.60%.
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