AT&T Inc. swung to a fourth-quarter profit as the company improved its wireless revenue and shed the burden of its customer-losing pay-TV business in 2021.
The wireless-and-broadband internet provider said Wednesday it expects to continue to grow revenue in its core cellular business while cutting overall costs in 2022. It said it expects to complete the merger of its WarnerMedia unit with Discovery Inc. in the second quarter, further streamlining its operations.
AT&T projected overall 2022 revenue will grow in the low single digits above last year’s $153.2 billion benchmark, which excludes its already-divested pay-TV business. Its WarnerMedia division set a full-year revenue target between $37 billion and $39 billion.
The telecom company also forecast annual capital expenditures in the $20 billion range with free cash flow in the $23 billion range. AT&T expects to cut its annual dividend payment to between $8 billion and $9 billion after the separation of its media unit, down from the roughly $15 billion it paid out last year.
Under pressure from investors to show progress on its strategic shift, AT&T had already announced quarterly subscriber gains for its wireless phone unit and HBO division.
After issuing preliminary results earlier this month, AT&T on Wednesday reported a final net gain of 884,000 postpaid phone subscribers over the December quarter, leading the wireless industry. T-Mobile US Inc. said it added roughly 844,000 of those subscribers over the same period. Verizon said Tuesday it ended the quarter with a net gain of 558,000 postpaid phone connections.
The company previously reported that its HBO unit, which includes HBO Max, ended 2021 with 73.8 million subscribers world-wide. That figure topped the target of 70 million to 73 million subscribers issued earlier in the year. The HBO unit’s domestic subscriptions hit 46.8 million at the end of the year.
In the December quarter, AT&T’s overall profit rose to $5.0 billion, or 69 cents a share, compared with a year-earlier loss of $13.89 billion, or $1.95 a share. A $15.5 billion accounting charge from the write-down of the telecom giant’s DirecTV unit skewed the year-ago result.
Overall revenue fell to $41 billion from $45.7 billion a year earlier, reflecting the satellite-TV operations’ absence. Excluding the divestiture and other items, AT&T said it had adjusted earnings of 78 cents a share, topping Wall Street’s 76-cent forecast.
Write to Drew FitzGerald at [email protected]
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