5 Most Notable Highlights From AT&T’s Q1 Earnings Call

AT&T (T) shares were volatile Wednesday morning after the company reported mixed first quarter financial results. The company missed revenue estimates, but beat on its bottom line. Following earnings, the company hosted an earnings call. The call, led by CEO John Stankey and CFO Pascal Desroches, emphasized the company’s sustained growth and strategic focus areas: 5G expansion, fiber deployment, and financial management. Here’s a closer look at the key takeaways for investors:

1. Growth in Key Connectivity Areas

AT&T continues to expand its 5G and fiber networks, reflecting in the increase of high-value postpaid phone subscribers and a reduction in churn rates. The company reported 349,000 postpaid phone net adds and 252,000 AT&T Fiber net adds during the quarter. These developments suggest a positive trend in both customer growth and service stability, potentially increasing the company’s revenue streams and customer retention over time.

2. Significant Fiber Expansion

The expansion of fiber infrastructure remains a priority for AT&T, with approximately 27 million locations now connected. This growth supports a steady increase in broadband subscribers and improves service reliability, which could enhance customer satisfaction and long-term value.

3. Financial Strategy and Performance

AT&T has shown substantial financial progress, highlighted by an increase in free cash flow to $3.1 billion for the quarter. The company is focused on reducing its debt, with a goal to achieve a net debt to adjusted EBITDA ratio of 2.5x by early 2025. These efforts indicate a strategic approach to managing capital and expenses, supporting ongoing and future operational needs.

4. Challenges in Business Wireline

The business wireline segment has shown a decline, with a 16.5% drop in EBITDA, primarily due to the reduction in legacy voice services. AT&T is addressing these challenges through various cost-cutting measures and productivity initiatives aimed at adapting to the changing technological landscape, where mobile and cloud-based solutions are becoming more prevalent.

5. Future Strategic Initiatives

The company has committed $5 billion over the current decade to help bridge the digital divide, aiming to connect 25 million people by 2030. This long-term investment not only aims to enhance national connectivity but also positions AT&T as a proactive participant in broader social and technological advancements.