AT&T lobbied hard for tax cuts in the US – and that effort has rather paid off. Thanks to the President-Trump-championed Tax Cuts and Jobs Act, the telco revealed this week it rounded out 2017 with some stonking financial figures.
AT&T spent $1bn of this giving 200,000 staff a $1,000 bonus and improved healthcare, is spending another billion to boost capital expenditures, and the rest looks like it is going to shareholders and the company cash stockpile.
"2017 was a remarkable year, for our country, for our industry, and for AT&T," said Randall Stephenson, AT&T chairman and CEO during a conference call with analysts on Wednesday. "It has been a long time since seen major public policy achievements and the combined impact is going to be growth. It all began in 2017 and regulations were removed and the biggest development has been around tax reform."
Here are the highlights for the fourth quarter, the three months to December 31, 2017:
- Revenue: AT&T saw its overall revenues fall slightly from $41.8bn last year to $41.7bn now. The biz saw big rises in the sales of wireless equipment and overseas sales which partially offset less than stellar growth in the US market.
- Net income: As mentioned, this was a stunningly good quarter, with profits hitting $19bn, an increase of 692 per cent on this time last year. The vast majority of the increase was down to the corporate tax rate reductions, the telco claimed.
- EPS: All that money has to go somewhere, and this was reflected in the earnings per share, but not by as much as some would have hoped. Diluted EPS for the quarter was $3.08, up from $0.39, but when adjusted to take into account of costs and write offs the EPS this quarter dropped to $0.78, up from $0.66 a year ago.
And as for the full year, the results are as follows:
- Revenue: Across the year AT&T pulled in $160.5bn in sales, down from $163.8bn in 2016. The telco said that legacy customers in the US were generating less money, but that international sales and business services were ameliorating this.
- Net income: Last year AT&T made $13bn in profit, but the new tax code made 2017 a bumper year, with the telco reporting profits of $29.5bn. That makes the millions of dollars AT&T spent pushing hard for tax cuts look like money very well spent.
- EPS: Earnings per diluted share were $4.76 compared with $2.10 for 2016.
Looking forward to 2018, Stephenson said the priority was to get on with the proposed merger with Time Warner, something the US government may not be onside to approve. Also planned for the coming year is the rollout of AT&T's 5G network using mobile hotspots, although fixed 5G installations and 5G mobiles may take until 2019.
Stephenson also said that he expects to see more deregulation of industry by the current government, saying the "regulatory pendulum is still swinging." While it does so he said the company would be pushing for new legislation as an "internet bill of rights," to cover internet policy and privacy.
Investment advisors Stone Fox Capital described the financials as "blah results with all the boosts coming from tax reform that overshadow weak results."
AT&T's stock price was up 3.18 per cent to $38.64 apiece in after-hours trading. ®