AT&T Q1 Earnings Snapshot: Focus on Telecom Investments and Debt (NYSE:T)

Justin Sullivan/Getty ImagesNews

AT&T (NYSE:T) is expected to announce first-quarter results on Thursday, April 21, before the market opens.

Over the past 2 years, T has exceeded EPS estimates 75% of the time and exceeded revenue estimates 63% of the time.

Over the past 3 months, EPS estimates have had 0 upward and 3 downward revisions.

The telecommunications company beat fourth-quarter earnings expectations and saw healthy growth in wireless subscribers and streaming entertainment from a revenue and user perspective. Revenue fell 10% to $41 billion, but was $550 million above expectations. And EPS of $0.78 beat the expected $0.75.

For the full year 2022, AT&T is on track for single-digit revenue growth and EPS of $3.10-3.15. Gross capital investment is expected to be in the $24 billion range, with capital expenditure of $20 billion and free cash flow of approximately $23 billion.

Earlier in April, AT&T (NYSE:T) completed its $43 billion deal with Discovery, severing its Time Warner unit and combining it with the media operations of Discovery, the parent company of networks like Food Network and Animal Planet.

The company disclosed cash inflows and a withholding of debt from WarnerMedia of a combined $40.4 billion, about $3 billion above previous guidance of $37.4 billion, according to Citi. . Following the divestiture, investors will examine how AT&T(T) is expanding its core telecommunications business. Adj. EPS is expected to fall for the first time since the fourth quarter of 2020, while revenue is expected to fall for the third consecutive quarter.

The first-quarter EPS consensus estimate is $0.69 (-19.8% y/y), while the revenue consensus estimate is $29.53 billion (-32.7% y/y). a year).

AT&T Outlook 2022

The company has seen a series of recent price target reductions, including at Deutsche Bank, BofA and Morgan Stanley, to reflect its new leaner business. JPMorgan restored its overweight rating while Citi extended the company’s tenure on its positive catalyst watchlist. Raymond James also reiterated an outperformance but said AT&T was not recession proof.

Recent analysis from SA contributors has also been broadly bullish, with Daniel Jones noting that investors should closely watch growth areas, debt and cash flow.

See how AT&T(T) key stats compare to its peers here.