Five things to watch April 29: Charter ends $3bn senior secured notes offering, AT&T releases Q1 2020 results, and ZTE spends 15% of revenue on R&D

Five things to watch April 29: Charter ends $3bn senior secured notes offering, AT&T releases Q1 2020 results, and ZTE spends 15% of revenue on R&D

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Capacity shares 5 key finance stories from around the world making headlines today!

AT&T feels the impact of Covid-19 on Q1 2020 results

AT&T reported adjusted earnings per share (EPS) $0.84 which would have been $0.89 without the impact of Covid-19.

“The Covid pandemic had a 5 cents per share impact on our first quarter. Without it, the quarter was about what we expected — strong wireless numbers that covered the HBO Max investment, and produced stable EBITDA and EBITDA margins,” said Randall Stephenson, chairman and CEO of AT&T.

The company also recorded revenues of $42.8 billion for the first quarter of 2020, compared to $44.8 billion in the same quarter last year.

Operating expenses were down 6.1% to $35.3 billion versus $37.6 billion in the same quarter in 2019.

Operating income was up $7.5 billion versus $7.2 billion in 2019, with operating expense reductions outpacing revenue declines.

Interestingly the company missed out the standard forward-looking financial guidance to the “COVID-19 pandemic and recover”.

Verizon starts Q1 of 2020 strong despite pandemic

Verizon reported $1.00 in earnings per share (EPS), compared with $1.22 in 2019, estimating that EPS and adjusted EPS included approximately negative 4 cents of COVID-19-related net impacts, primarily driven by an increase to its bad debt reserve.

Operating was down by 1.6% to $31.6 billion. The company cites growth in wireless service revenue in the consumer and business segments, offset by large reductions in equipment revenue due to social distancing measures because of Covid-19, limiting in-store customer engagement.  

Operational cash flow topped $8.8 billion, an increase of $1.7 billion from first-quarter 2019. While capital expenditures were $5.3 billion for the period.

"Verizon began 2020 with strong operational performance. In an unprecedented time, Verizon took decisive and balanced actions that will serve our stakeholders in the long term, including protecting our employees, maintaining our network quality and reliability, serving our customers, and supporting our communities,” said Hans Vestberg, chairman and CEO of Verizon.

“We will emerge from this crisis stronger, knowing we provided critical connectivity to our customers, and especially our first responders, while maintaining our commitment to investing in our 5G and fibre strategies. We are particularly proud of our employees who continue to deliver essential services to our customers and those on the front lines so they can serve others."

Shaw launches $500m senior notes offering

Shaw Communications has unveiled the terms of its C$500 million 2.90% senior notes offering.

Due 9 December 2030, the company says it will use the net proceeds of the offering as working capital and general corporate purposes.

Shaw says it may also use the proceeds to invest in bank deposits and short-term marketable securities, as well as to pay off any debts.

The notes will be made available in Canada, under Shaw’s previously filed shelf prospectus subject to an agency agreement with TD Securities and CIBC World Markets that are acting as joint bookrunners.

Charter ends $3bn senior secured notes offering

Charter Communications, through its subsidiaries Charter Communications Operating LLC and Charter Communications Operating Capital Corp, has closed its $3 billion senior notes offering.

Specifically, the offering is comprised of $1.6 billion in senior secured notes due 2031 and $1.4 billion in senior secured notes due 2051.

The 2031 notes have an interest of 2.800% per annum and were issued at a price of 99.561% of the aggregate principal amount.

While the 2051 notes have an interest rate of 3.700% per annum and were issued at a price of 99.217% of the aggregate principal amount.

BofA Securities, J.P. Morgan Securities and Morgan Stanley & Co acted as joint book-running managers for the senior secured notes offering.

ZTE spends 15% of revenue on R&D in first quarter of 2020

ZTE recently published its first quarter results for 2020 amid its decision to spend 15% of its revenues research and development (R&D).

The company reported $3 billion (RMB 21.484 billion) in operating revenue, earnings per share was $0.20 (RMB 0.18) and net profit after extraordinary items attributable to holders of ordinary shares were $22.6 million (RMB 160 million).

For the three months R&D costs amounted to $457 million (RMB 3.241 billion) amounting to 15.1% of operating revenue. This figure increased by 1.2% compared to the same period in 2019.

The results follow a strong first quarter for ZTE having secured participation in the 5G RAN, 5G SA core network, 5G transport centralised procurement for China Mobile, China Telecom and China Unicom.

Looking ahead, the company says that it will pay special attention to the global epidemic coordinating with its global customers and partners to support them during this time.

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