Published: Thu, February 01, 2018
Finance | By Claude Patterson

AT&T Inc. (T) Q4 US Wireless Net Adds 500000 Above Estimates

AT&T Inc. (T) Q4 US Wireless Net Adds 500000 Above Estimates

(T) rose 3% late Wednesday after the company reported adjusted fourth-quarter earnings and sales that beat expectations.

AT&T, which owns satellite television service DirecTV, said it lost 207,000 traditional USA video subscribers in the quarter as more consumers drop their pay-TV packages.

The company announced that it saw strong growth in wireless customers as well as fewer cancellations of subscribers than was projected on Wall Street. AT&T's postpaid churn rate was 0.89%, ahead of the 1.15% that StreetAccount forecasted. The total was lower, therefore better, than Wall Street's expectation of 1.15 percent, according to StreetAccount. AT&T said it earned $19 billion, or $3.08 a share, in the quarter, compared with $2.4 billion, or 39 cents a share, in the year-ago period.

"The impact of tax reform and regulatory rationalization will be substantial and positive for the US economy and AT&T", Randall Stephenson, AT&T Chairman and CEO, said in a statement.

For 2018, it's guiding to EPS of about $3.50 (above consensus for $2.97), free cash flow of about $21B, and capex approaching $25B.

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.

AT&T in Decembers said it would give bonuses of $1,000 to over 200,000 employees in the US citing the tax reform passage as the reason.

The new tax law slashes the corporate tax rate to 21 percent from the previous rate of 35 percent. AT&T said in its annual report of 2016 that it had an effective tax rate of 32.7%.

The company could also stand to benefit from the FCC's recent repeal of net neutrality regulation. He said AT&T will also launch a new version of its streaming service, DirecTV Now, in the spring that allows customers to record shows on cloud DVR and stream on up to three devices at the same time. He said, however, that Congress needs to create legislation that governs internet companies and protects consumers. Late a year ago, the Justice Department challenged AT&T's pending merger with Time Warner.

But Stephenson said in Wednesday's release that the company looks forward to presenting its case in court and finalizing the Time Warner deal.

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