AT&T and Verizon share FY21 and Q4 results
AT&T and Verizon have released their most recent financial results, covering the full year 2021 and fourth quarter.
Verizon's results, released Tuesday US time, highlighted the September sale of Verizon Media and the continued – yet troubled – roll out of 5G across the US.
Verizon said that when consolidated operating revenue for the quarter is adjusted for the $5 billion sale of Verizon Media to Apollo Funds, the final figure grew 4.8% year over year. Without this consideration operating revenue was down 1.8% compared to the same quarter in 2020.
For FY21 consolidated operating revenues were $133.6 billion, up 4.1% year over year, but "strong wireless service revenue growth and wireless equipment revenue were offset by continued declines in legacy wireline products".
Cash flow from operations totalled $39.5 billion in 2021, a decrease from the $41.8 billion recorded the year before.
Net income increased 0.4% in Q421 compared to Q420, while the adjusted EBITDA of $11.8 billion, was "relatively flat compared to fourth-quarter 2020".
Verizon Business revenues were $7.8 billion in fourth-quarter 2021, down 3% year over year while total Verizon Consumer revenues were $25.7 billion in fourth-quarter 2021, an increase of 7.4% year over year.
On 5G, more than one in three consumer wireless phone customers now have a 5G-capable device and Verizon saw 667,000 wireless retail postpaid net additions in the last quarter – although 5G breakdowns were not provided.
Consumer wireless service revenues were $14.6 billion in fourth-quarter 2021, a 7.7% increase year over year, reflecting "ongoing step-ups to unlimited and premium unlimited plans, and the contribution from TracFone".
"2021 was a transformational year for Verizon that will serve as a catalyst for us," said Verizon Chairman and CEO Hans Vestberg.
"We delivered on all of our goals in 2021 and made great progress on our five paths of growth, finishing the year with strong operating and financial momentum. As we move into 2022, we have the necessary assets to realize our strategy that we laid out in 2019. We are laser focused on executing our 5G strategy and providing value to our customers, shareholders, employees, and society, as 2022 will be the most exciting year yet for Verizon."
On the outlook, Verizon expects reported wireless service revenue growth in the range of 9-10% and adjusted earnings per share of $5.40 to $5.55.
There is also expectation that capex will decrease from $18.2 billion in 2021 to $16.5 billion to $17.5 billion this year. However that would exclude C-band spectrum costs. These are expected to be in the range of $5 billion to $6 billion as Verizon "continues to build out the initial markets and begins preparations for deploying phase two spectrum".
On the factors that could influence a less positive result, Verizon listed cyberattacks and 5G costs. On the latter it specified additional costs could be incurred through "performance issues or delays in the deployment of our 5G network resulting in significant costs or a reduction in the anticipated benefits of the enhancement to our networks".
CFO Matt Ellis said: "Our financial discipline enabled us to deliver attractive service revenue growth and profitability this quarter as we expanded our portfolio with the TracFone acquisition and saw strong demand for our products and services. In 2021 we delivered on raised adjusted EPS* expectations, grew revenue, achieved our $10 billion cost savings goal, and funded our C-Band spectrum investment."
Meanwhile, at AT&T there was no mention of the impact of 5G, but there were plenty of new customers to shout about.
AT&T highlighted how postpaid phone net adds gained more subscribers in this period than in the prior 10 years combined. AT&T also added more than one million fibre subscribers — the fourth consecutive year in which it has added one million or more.
“A year and a half ago, we began simplifying our business to reposition AT&T for growth and we’re extremely pleased with how we’ve executed on that commitment,” said John Stankey, AT&T CEO. “We ended 2021 the way we started it – by growing our customer relationships, running our operations more effectively and efficiently, and sharpening our focus. Our momentum is strong and we’re confident there is more opportunity to continue to grow our customer base and drive costs from the business.
“We’re at the dawn of a new age of connectivity. Our focus now is to be America’s best connectivity provider and also ensure our media assets are positioned to grow and truly become a global media distribution leader. Once we do this, we’ll unlock the true value of these businesses and provide a great opportunity for shareholders.”
For the quarter, AT&T reported consolidated revenues of $41 billion; adjusted EPS of $0.78 compared to $0.75 in the year-ago quarter; cash from operations of $11.3 billion and capital expenditures of $3.8 billion. Gross capital investment on the other hand was $4.9 billion and cash content spend stood at $4.6 billion
Free cash flow stood at $8.7 billion.
For the full year 2021 AT&T recorded consolidated revenues of $168.9 billion; cash from operations of $42 billion; capex of $16.5 billion with gross capital investment of $21.6 billion. Free cash flow was $26.8 billion with a total dividend pay out ratio of 56%.
AT&T's conference call is scheduled for Wednesday.