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AT&T: Q2 2022 Earnings Update

Industry: Telecom
Current: Company Performance

AT&T reported a decline in revenues from continuing operations of 17.1% year-over-year in Q2 2022
AT&T reported GAAP diluted earnings per share (EPS) of $0.59
AT&T maintained its revenue and EPS guidance, but lowered its full-year cash flow guidance

On July 21, 2022, AT&T reported Q2 revenues of $29.6 billion (a decline of 17.1% year-over-year) on adjusted diluted earnings per share (EPS) of $0.65.

Summary: AT&T’s Q2 2022 revenues declined by 17.1% as compared to the same period in 2021. AT&T now reports its revenues across two segments: Communications and Latin America since the closing of the WarnerMedia transaction in April 2022.

Communications business’ revenues increased by 2.0% vs 2021 owing to the increases in Mobility and Consumer Wireline businesses, although Business Wireline witnessed a decline. The three sub-segments of this business are:
- Mobility: revenues increased by 5.2% vs 2021 owing to higher service and equipment revenues.
- Business Wireline: revenues decreased by 7.6% vs 2021 owing to lower demand for legacy voice and data services.
- Consumer Wireline: revenues increased by 1.1% vs 2021 owing to the gains in broadband although the legacy voice and data services and other services witnessed a decline.
WarnerMedia was acquired by Discovery and the deal closed in April 2022.
Latin America business’ revenues increased by 17.4% vs 2021 owing to the increased growth in service revenues.

The company reported earnings from operations of $4.96 billion during Q2 2022, resulting in GAAP operating margins of 16.7%. On the bottom line, the company reported a GAAP diluted EPS of $0.59, whereas the adjusted diluted earnings came to $0.65 per share.

Guidance: For 2022 the management has guided to:

Total revenue guidance of low-single-digit growth.
Mobility business guidance increased from 3% to 4.5-5%.
Broadband revenue unchanged at 6% growth.
Adjusted diluted EPS of $2.42-$2.46, remains unchanged.
Free cash flow guidance reduced from the $16 billion range to the $14 billion range.

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