AT&T Lives Up To Expectations Of Analysts For 4QFY15

AT&T shares, telecommunication fourth quarter, telecom company, wireless service

The telecommunication company is currently being traded at a share price of $35.49.

AT&T reported the financial results for the fourth quarter of fiscal year 2015 on Tuesday. During the after hour trading, the shares of the telecommunication dipped slightly after the announcement, and were traded at a share price of $35.18 down by 0.62%. The revenue for the quarter was $4.01 billion, while during the same quarter in the previous year it witnessed a loss.

The telecommunication organization managed to meet analysts’ estimations of earnings per share of $0.63 but fell short on the revenue estimation. For the latest quarter, analysts had predicted revenue generation of $42.75 billion whereas the wireless telecommunication company reported revenue of $42.1 billion.

Additionally, there was a year-over-year decline in the number of postpaid subscribers as well as the total subscribers by as much as 1.18% and 1.5% respectively. During the quarter, the company reported that it added 526,000 postpaid subscribers and over 2.2 million wireless additions.

Since the beginning of the New Year, AT&T shares have increased by 3% — during the trading session on Tuesday, the shares saw an increase of 7%. In July 2015, the telecom company acquired DirecTV for $49 billion. Since this acquisition, the organization has been actively focusing on offering services across all platforms especially video streaming, according to CNBC.

The key revenue drivers of the business are the wireless service, internet access and pay-television – all these revenue drivers managed to perform quite well in all the three quarter of FY15. A decline in the fourth quarter would have made sense as the rival company, T-Mobile, decreased its cost – but it still succeeded to keep the growth steady. There was a drop of 4.9% in wireless revenue due to lower equipment sales, as reported by Re/Code.

Subsequently, wireless business division of AT&T is likely to face a lot of competition from its rival ‘T-Mobile’ as there is hardly any difference in the network quality. Unless the telecom company cuts prices, its competitor is predicted to capture its audience.

For the current fiscal year, the business is likely to report a growth of 4 to 6% in earnings per share, as they were $2.71 in fiscal year 2015. The consensus for FY16 is $2.81, while the carrier is expecting to report EPS somewhere in between $2.82 and $2.87.

In an effort to improve its net margin, AT&T tried its best to reduce its operational costs throughout 2015. Operational expense for the year was reported to be $34.6 billion for the quarter, which indicated a decrease from an initial expense of $39.9 million. It reported total operating revenue of $146.8 billion for the year. The analysts had estimated the total operating revenue to be $147.3 billion. In sales, a year-over-year growth of 10.8% was reported.

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