AT&T INC. (NYSE:T) Files An 8-K Other EventsITEM 8.01 Other Events.
On October 11, 2017, AT&T Inc. ("the Company") provided updated financial information on certain events and trends impacting its third-quarter 2017 results.
The company reiterates its full-year 2017 guidance of mid-single digit adjusted earnings growth, adjusted consolidated operating margin expansion, capital expenditures in the $22 billion range, and free cash flow at the low end of the $18 billion range.
Several devastating hurricanes, as well as earthquakes in Mexico, significantly impacted certain regions of our service area during the third quarter. Damage to our network and other property, costs to restore services, and revenue declines from waived charges will decrease our reported third-quarter 2017 consolidated revenues nearly $90 million and our reported pre-tax earnings about $210 million, or $0.02 per diluted share. We expect further reductions in the fourth quarter as we continue to assess damage to our network and fully restore service.
We also expect to report the following for the third quarter:
Nearly 300,000 DIRECTV NOW net adds with total U.S. video subscribers down about 90,000.
The video net losses were driven by heightened competition in traditional pay TV markets and over-the-top services, hurricanes and our stricter credit standards. The decline of traditional video subscribers negatively impacts our Entertainment Group revenues and margins, resulting in an adjusted consolidated operating income margin that will be essentially flat versus the year-ago third quarter.
The company continued to expand its postpaid smartphone base even as it had nearly 900,000 fewer handset equipment upgrades than in the year-ago third quarter. These lower upgrades will adversely impact wireless equipment revenue. This trend does not affect gross adds and we continue to see low postpaid phone churn levels.
Effective July 1, 2017, we are reporting prepaid Internet of Things (IoT) connections as a separate class within our subscriber categories. These connections primarily relate to customers that actively subscribe for vehicle connectivity. This will result in 97,000 additional prepaid net adds in the quarter with a corresponding decline in connected device net adds. The prepaid subscriber base will be adjusted by an increase of 543,000 connections with a corresponding decline in the connected device subscriber base to reflect subscriber activity prior to the third quarter.
CAUTIONARY LANGUAGE CONCERNING FORWARD-LOOKING STATEMENTS
Information set forth in this filing contains financial estimates and other forward-looking statements that are subject to risks and uncertainties. A discussion of factors that may affect future results is contained in AT&T's filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update or revise statements contained in this filing based on new information or otherwise.
About AT&T INC. (NYSE:T)
AT&T Inc. is a holding company. The Company offers communications and digital entertainment services in the United States and the world. It operates through four segments: Business Solutions, Entertainment Group, Consumer Mobility and International. The Business Solutions segment includes various categories, including wireless service, fixed strategic services, legacy voice and data services, other services and wireless equipment. The Entertainment Group segment provides video, Internet and voice communication services to residential customers in the United States and the United States territories. The Consumer Mobility segment provides wireless service to consumers, and wireless wholesale and resale subscribers located in the United States or in the United States territories. The International segment provides video entertainment services to residential customers in Latin America, and wireless data and voice communication services to consumer and business customers in Mexico.