AT&T Q2 growth in net additions driven by connected devices and new prepaid and postpaid customers

AT&T reported strong adjusted earnings growth and margin expansion with lower expenses in the second quarter.

2.8 million wireless net adds:

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  • 3 million U.S., driven by connected devices, prepaid and postpaid
  • 476,000 Mexico net adds

Entertainment Group results:

  • 112,000 IP broadband net adds; 8,000 total broadband net adds
  • More than 5.5 million AT&T Fiber customer locations passed
  • Total video losses of 199,000 with DIRECTV NOW gains helping offset traditional TV subscriber decline; Total video subscribers essentially flat year over year

AT&T’s consolidated revenues for the second quarter totaled $39.8 billion versus $40.5 billion in the year-ago quarter, primarily due to declines in legacy wireline services and consumer mobility.

Compared with results for the second quarter of 2016, operating expenses were $32.5 billion versus $34.0 billion; operating income was $7.3 billion versus $6.6 billion; and operating income margin was 18.4% versus 16.2%.

Second-quarter net income attributable to AT&T totaled $3.9 billion, or $0.63 per diluted share, compared with $3.4 billion, or $0.55 per diluted share, in the year-ago quarter. Adjusting for $0.16 of costs for amortization, merger- and integration-related expenses and other items, earnings per diluted share was $0.79 compared with an adjusted $0.72 in the year-ago quarter, up 9.7%.

Cash from operating activities was $8.9 billion in the second quarter and $18.2 billion year to date. Capital expenditures were $5.2 billion in the quarter and $11.2 billion year to date. Free cash flow — cash from operating activities minus capital expenditures — was $3.7 billion for the quarter and $6.9 billion year to date.

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