AT&T positive aspects three% after earnings beat, sturdy steerage

Andrew Cummings
February 1, 2018

Shares were up 3.8 percent to $38.87 in after-hours trading. Operating expenses rose to $41.3B from $37.6B chiefly due to a network asset write-off and higher wireless equipment costs. The rate was lower at 0.89%, which is better than the expectation on Wall Street of 1.15%.

Conference call to come at 4:30 p.m. ET.

AT&T said it added 4.1 million wireless customers in the fourth quarter, with 2.7 million from the United States and almost 1.3 million from Mexico.

Wall Street was expecting earnings of 75 cents per share on revenue of $40.1 billion. The company said as well that it had it lowest fourth quarter cancellation rate by subscribers than for any previous fourth quarter.

For 2018, AT&T said it expects adjusted earnings of about $3.50 per share.

Randall Stephenson, chairman and CEO of AT&T, believes the tax reform law and "regulatory rationalization" will have a positive effect on the company. AT&T said that rate will likely lead to an additional $3 billion in cash.

Since exchanging fire with the DOJ after the lawsuit was filed last fall, AT&T has appeared to be making an effort to smooth things over, praising Trump by name for his tax overhaul and handing out employee bonuses.

Dallas-based AT&T said Wednesday that it'll debut a small streaming device that allows customers to login into Netflix, DirecTV Now or another service to watch their favorite shows on their home TVs. Stephenson said that the industry needs the "long-term predictability" and clarity on issues like customer privacy and internet regulation.

The U.S. Department of Justice sued to block the deal past year on grounds that it was anticompetitive. He said the AT&T was surprised that the government moved to block the deal, calling the proposed acquisition a "classic vertical merger between two companies that don't even compete with one another". With 50 years of legal precedent, this is the type of business combination that the government has consistently approved with appropriate conditions.

The court date for the DOJ's challenge of the merger is set for March 19, 2018.

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