AT&T posts $4.0 billion Q4 net income, shares rise

Today, AT&T Inc. (NYSE:T) disclosed its fourth-quarter earnings for 2024, with a notable rise in net income to $4.0 billion, or $0.56 per diluted share, compared to $2.1 billion, or $0.30 per share, in the same quarter of the previous year. This increase includes a $0.1 billion benefit from tax items, offset by a net loss from pension-related adjustments and other items.

For the full year of 2024, AT&T reported a net income of $10.7 billion, a decrease from $14.2 billion in 2023. The annual earnings per diluted share were $1.49, influenced by restructuring and impairment charges, DIRECTV intangible amortization, and pension adjustments, partially balanced by tax benefits and other items.

The company's operating revenues in the last quarter of 2024 slightly increased by 0.9 percent to $32.3 billion, driven by higher Mobility and Consumer Wireline revenues. However, full-year revenues saw a marginal decline of 0.1 percent to $122.3 billion due to lower Business Wireline and equipment revenues, despite gains in Mobility service and Consumer Wireline.

Operating expenses for the quarter rose to $27.0 billion, up from $26.8 billion in the prior year, mainly due to accelerated depreciation on wireless network equipment related to network modernization efforts. Full-year expenses climbed to $103.3 billion, up from $99.0 billion, largely due to a significant noncash goodwill impairment.

The operating income for the fourth quarter remained stable at $5.3 billion, with an operating income margin of 16.5 percent for both 2024 and the comparable period in 2023. The full-year operating income decreased to $19.0 billion from $23.5 billion, with a decreased operating income margin of 15.6 percent compared to 19.2 percent in 2023.

Other income (expense) - net for the quarter was $0.6 billion, reflecting a lower actuarial loss on pension and postretirement benefits. The full-year other income (expense) - net was $2.4 billion, an increase from $1.4 billion in 2023, also due to lower actuarial losses.

AT&T's cash from operating activities for the year increased to $38.8 billion, with capital expenditures totaling $20.3 billion. Including cash paid for vendor financing, the total capital investment was $22.1 billion, down from $23.6 billion in the previous year.

The Communications segment saw a 1.1 percent increase in operating revenues for the quarter, with Mobility revenues up by 3.3 percent driven by service and equipment revenue growth. Consumer Wireline revenues also grew by 3.4 percent, attributed to fiber growth. However, Business Wireline revenues declined by 10.0 percent due to lower demand for legacy services. With an EBITDA of $42.77 billion and a P/E ratio of 18.36, AT&T demonstrates strong operational efficiency. For deeper insights into AT&T's financial health and growth potential, InvestingPro subscribers can access exclusive analysis and 8 additional ProTips that help decode the company's true value proposition.

In Latin America, operating revenues decreased by 4.2 percent, affected by foreign exchange rates, despite higher equipment sales and subscriber growth. Mexico's operating income margin improved to 2.0 percent.

The detailed financial report is based on AT&T's latest SEC filing and highlights the company's financial performance as it navigates through a dynamic telecommunications landscape.

In other recent news, AT&T has entered into a significant $850 million sale-leaseback agreement with private developer Reign Capital. This deal involves 74 of AT&T's less utilized properties across the U.S. and is expected to generate immediate cash while also providing potential future profit sharing from property redevelopment. The company will maintain operational control of areas necessary for infrastructure access.

In the realm of analyst assessments, AT&T has been the subject of several upgrades and reassessments. Argus analysts upgraded AT&T shares from Hold to Buy, recognizing the company's strategic shift towards the integration of wireless and fiber internet services. RBC Capital Markets also upgraded AT&T from Sector Perform to Outperform, while Citi analysts maintained a Buy rating, expressing confidence in the company's potential to meet its 2024 guidance.

However, AT&T faced a significant security breach last year, which resulted in the exposure of confidential FBI data. The breach included six months of mobile phone customer data, potentially compromising criminal investigations and national security. The incident has raised concerns about the protection of secret sources and the security practices of both AT&T and the FBI.

These recent developments provide insights into AT&T's ongoing activities and strategies, including its focus on real estate transactions, analyst ratings, and security challenges.

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