ATT Pref A ADR 2025 Q1 Earnings Strong Performance as Net Income Surges 25.1%

AT&T Pref A ADR(TPRA) reported its fiscal 2025 Q1 earnings on Apr 29th, 2025. AT&T surpassed expectations with a 2.0% revenue increase to $30.63 billion and a 29.8% rise in EPS to $0.61. The company maintained its guidance for 2025, expecting consolidated service revenue growth in the low-single-digit range and mobility service revenue growth between 2% and 3%. AT&T plans capital investments around $22 billion while projecting adjusted EPS between $1.97 and $2.07 for the full year. The strategic priorities remain unchanged, focusing on operational efficiency and technological advancements.

Revenue

AT&T's first-quarter revenue saw a 2.0% increase to $30.63 billion compared to the previous year. The Communications segment dominated with $29.56 billion, while Latin America - Mexico generated $971 million. The Corporate and Other segment contributed $95 million, showcasing AT&T's diverse revenue streams and strong operational performance.

Earnings/Net Income

AT&T Pref A ADR's EPS rose significantly by 29.8% to $0.61 from $0.47, underscoring continued earnings growth. The company's net income surged by 25.1%, reaching $4.69 billion from $3.75 billion in the previous year. The EPS growth reflects strong business fundamentals and favorable market conditions.

Post Earnings Price Action Review

The post-earnings impact on AT&T Pref A ADR stock price revealed mixed results. Although specific data on revenue impact was lacking, increased revenue usually suggests positive stock movement due to heightened sales potential. The backtest data indicated that net income and EPS tend to influence stock performance positively in the short to medium term. Notably, net income showed a 30% win rate over three days, and both net income and EPS had a win rate of 50% over ten and thirty days, respectively. This suggests investor optimism following reports of net income and EPS exceeding expectations. However, the varied results underscore the need to consider additional market factors when evaluating earnings report impacts on stock prices.

CEO Commentary

John Stankey, AT&T Chairman and CEO, expressed confidence in the company's performance, noting, "Our business fundamentals remain strong, and we are uniquely positioned to win in this dynamic and competitive market." He highlighted the robust growth in 5G and fiber services, emphasizing that AT&T is focused on delivering high-quality and profitable subscriber additions. Stankey reaffirmed that the strategic priorities outlined at the 2024 Analyst & Investor Day remain unchanged, driving efforts towards operational efficiency and technological advancements while managing debt reduction effectively.

Guidance

For the full year 2025, AT&T expects consolidated service revenue growth in the low-single-digit range and mobility service revenue growth in the higher end of 2% to 3%. The company anticipates adjusted EBITDA growth of 3% or better and free cash flow exceeding $16 billion. Additionally, AT&T projects adjusted EPS between $1.97 and $2.07, with capital investments around $22 billion, while maintaining a focus on its core competencies amidst the planned sale of its 70% stake in DirecTV.

Additional News

In recent strategic developments, AT&T Inc. announced a significant partnership with Palo Alto Networks to enhance security solutions integrated with AT&T's network, aiming to provide secure connectivity solutions for business customers. Additionally, AT&T plans a strategic share buyback of at least $3 billion by year-end, demonstrating a commitment to returning value to shareholders. Moreover, analyst Tigress Financial maintained their "Buy" rating on AT&T, adjusting the price target to $34, reflecting positive sentiment surrounding AT&T's strategic initiatives and market position.