In presenting their second quarter 2020 financial results last week, AT&T announced due to the continued lack of visibility related to COVID-19 and its economic impact, the company was providing limited financial guidance. The telecom expects gross capital investment in the $20 billion range in 2020.
“Wireless is clearly AT&T’s best business,” said Craig Moffett of MoffettNathanson, “and, despite a loss of roaming revenue that pushed service revenue growth in Q2 into negative territory, and despite a loss of post-paid phone subscribers due to store closures and a slowing of promotional activity, the business is doing reasonably well. Margins in Q2, to cite just one high point, were very strong. Largely left out of the debate is the Mobility segment,” Moffett said.
The company said strong cash flows reflect resiliency of core subscription businesses; balance street strengthened; business transformation underway. Highlights included:
- Diluted EPS of $0.17 as reported compared to $0.51 in the year-ago quarter
- Adjusted EPS of $0.83 compared to $0.89 in the year-ago quarter (did not adjust for COVID-19 impacts: ($0.03) of incremental costs and ($0.06) of estimated revenues)
- Cash from operations of $12.1 billion
- Capital expenditures of $4.5 billion; purchased additional $1 billion in new spectrum for 5G
- Free cash flow of $7.6 billion; total dividend payout ratio of 49%
- Consolidated revenues of $41.0 billion