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AT&T Q2 Adj. EPS Tops Estimates, But Revenues Miss

at&t aug07 23jul20 lt

Telecom giant AT&T, Inc. (T) reported Thursday a 66 percent decline in profit for the second quarter, primarily hurt by goodwill impairment, amortization and severance charges as well as merger and integration-related expenses.

Adjusted earnings for the quarter topped analysts' expectations, while quarterly revenues missed their estimates.

For the second quarter, net income attributable to AT&T was $1.28 billion or $0.17 per share, lower than $3.71 billion or $0.51 per share in the year-ago quarter.

The results for the latest quarter include $0.66 per share of primarily non-cash Vrio goodwill impairment, merger-amortization costs, severance charges, and merger- and integration-related expenses.

Excluding other items, adjusted earnings was $0.83 per share, compared to $0.89 per share in the year-ago quarter.

AT&T's consolidated revenues for the quarter declined 8.9 percent to $40.95 billion from $44.96 billion in the same quarter last year, primarily due lower revenues across all its operating segments amid the impact from COVID-19 pandemic.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $0.79 per share on revenues of $41.10 billion for the quarter. Analysts' estimates typically exclude special items.

Revenue declines at WarnerMedia included lower content and advertising revenues partly due to COVID-19. Revenues also declined in domestic video and legacy wireline services, and Latin America was impacted by foreign exchange pressure.

Operating income plunged 52.9 percent to $3.53 billion from last year's $7.50 billion, primarily due to the Vrio goodwill impairment, severance charges, COVID-19 costs and the net impact of lower revenues and operating expenses.

Operating expenses edged down $37.42 billion from $37.46 billion in the year-ago quarter.

The company said it is providing limited financial guidance, due to the continued lack of visibility related to COVID-19 and its economic impact.

The Company continues to expect the total dividend payout ratio at year-end 2020 to be in the 60s percent range and is targeting the low end of that range. The Company also expects gross capital investment in the $20 billion range in 2020.

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