AT&T CFO John Stephens said the company expects some negative effects on first-quarter results, due to the stronger dollar, increased amortisation and lower hardware sales. Speaking at the Deutsche Bank Media, Internet and Telecom Conference, he said the group's full-year adjusted EPS guidance issued in January remains unchanged.
EPS on a quarter-by-quarter basis may vary from historical trends due to results from WarnerMedia, which AT&T acquired in June 2018, the company said.
For Q1, AT&T noted that mobile customers are continuing to hold onto their devices for longer periods of time. As a result, through February, equipment revenues were down by about USD 100 million year over year. AT&T said this is not expected to affect wireless profitability and it still expects growth in wireless service revenue.
The strengthening US dollar will affect reported revenues from foreign operations in WarnerMedia, DirecTV Latin America and business wireline services, but the revenue impacts are generally expected to be mostly offset by similar impacts on expense from these foreign operations, AT&T said.
In addition, first-quarter wireless service margins and adjusted EPS will be impacted by a USD 200-300 million increase in amortization of prior-year commissions. Furthermore, Stephens noted that the company expects WarnerMedia results to be stronger in the second half of the year, after higher sports programming costs in the first six months of the year.
AT&T will reports first-quarter 2019 results on 24 April.
