UK fiber broadband challenger brand Netomnia is courting multiple buyers for a potential £2 billion sale, and has held advanced talks with rival CityFibre https://t.co/OOGrMPJtCq ...

Core Insights - AT&T Inc. is set to report Q3 2025 earnings on October 22, with revenue and earnings estimates at $30.96 billion and $0.55 per share respectively [1][8] - The earnings estimate for 2025 remains unchanged at $2.05 per share, while the 2026 estimate has slightly decreased from $2.26 to $2.25 [1] - The company has a four-quarter average earnings surprise of 4.54% [3] Earnings Performance - The reported earnings for the last four quarters were as follows: $0.54, $0.51, $0.54, and $0.60, with estimates of $0.51, $0.52, $0.48, and $0.59 respectively [4] - The average surprise for these quarters was 4.54% [3][4] Earnings Predictions - AT&T has a positive Earnings ESP of +0.92% and a Zacks Rank of 3, indicating a potential earnings beat for the upcoming quarter [5] Strategic Collaborations - The company has partnered with Cisco to launch a cloud-delivered networking and security solution, enhancing its enterprise network security offerings [9] - An agreement with PRIME FiBER aims to provide wholesale fiber broadband services in Arizona, focusing on fiber densification [10] Business Developments - AT&T completed the divestiture of its remaining 70% stake in DIRECTV, allowing a greater focus on 5G and fiber expansion [11] - The acquisition of wireless spectrum licenses from EchoStar, valued at $23 billion, will enhance AT&T's spectrum portfolio and 5G capabilities [12] Competitive Landscape - The company faces intense competition from Verizon and T-Mobile, particularly in the network security and 5G sectors [14][21] - Despite strong performance in the wireless business, AT&T's margins are pressured by competition and declining demand for legacy services [20][21] Financial Metrics - The Zacks Consensus Estimate for revenues from the Communications segment is $30.03 billion, while the model projects $30.66 billion [15] - AT&T's stock trades at a forward P/E ratio of 11.8, lower than the industry average of 12.53 [18] Growth Drivers - Solid demand trends in the Communication segment, particularly in Consumer Wireline and Mobility, are driving growth [19] - The company is expanding its fiber footprint and investing in infrastructure to support growth in the fiber broadband domain [19] Challenges - Weakness in business wireline services due to lower demand for legacy offerings poses a challenge [20] - The current ratio of 0.81 and cash ratio of 0.22 indicate potential difficulties in meeting short-term obligations [21]

AT&T has focused its strategy on connectivity through 5G wireless and fiber broadband. CFO Pascal Desroches and CEO John Stankey explain fiber’s advantage over legacy copper networks, and how the combination of fiber and 5G is more cost-efficient. Tune into this episode of Chief Future Officer tomorrow at 9:30 pm ET ...

Financial Data and Key Metrics Changes - Revenue for Q4 2024 was $242.9 million, a sequential increase of $15.1 million or 7% and an increase of $17.4 million or 8% year over year [17][18] - Non GAAP gross margin for Q4 was 42%, a sequential decline of 11 basis points, while non GAAP operating profit was $7.9 million or 3.3% of revenue, up from $2.5 million or 1.1% in Q3 2024 [19][20] - For the full year 2024, non GAAP gross margin expanded to 41.9% from 39.3% the prior year, and non GAAP operating profit turned positive for the full year compared to negative figures earlier in the year [15][16] Business Line Data and Key Metrics Changes - The Network Solutions segment generated $197 million, accounting for approximately 81% of total revenue in Q4, while the Services and Support segment delivered $45.8 million or 19% of total revenue [18] - Optical networking revenue increased by 16% sequentially to $81.6 million, while subscriber solutions revenue was $88.5 million, down 2% sequentially [18][19] - Access and aggregation solutions grew 8% sequentially, driven by fiber footprint expansion and network upgrades [10] Market Data and Key Metrics Changes - U.S. revenue increased by 10% quarter over quarter, with non U.S. revenue accounting for 57% of total revenue [6][18] - The company added 18 new customers in the optical networking segment, including a mix of fiber broadband customers, government agencies, and large enterprises [8][9] Company Strategy and Development Direction - The company aims to strengthen its balance sheet and is in the process of selling unused corporate real estate and monetizing non-core assets [23] - The focus is on expanding fiber networks and enhancing customer experiences through better insights and automation [13][14] - The company anticipates moderately higher operating expenses for 2025 in line with normalized payrolls and benefit increases [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities in the optical segment, citing improvements in customer inventory levels and demand for scalable, secure optical networks [9][10] - The environment has improved significantly over the past six months, with increased bookings and a more positive outlook for the upcoming quarters [33][34] - The company expects revenue for Q1 2025 to range between $237.5 million to $252.5 million, with a non GAAP operating margin between 4% to 5% [25][24] Other Important Information - The company achieved net cash provided by operating activities of $104.3 million in 2024, a significant improvement from a net cash used of $45.6 million in 2023 [16][22] - Free cash flow for the year was $39.9 million, an increase of $128.7 million from the prior year [22] Q&A Session Summary Question: Balance sheet and net cash position - Management confirmed expectations to reduce inventory and generate free cash flow, aiming for a net cash position by the end of the year [29][30] Question: Sustainability of telecom recovery - Management noted that visibility is based on purchase orders and backlog, with a positive trend observed in bookings [32][33] Question: Inventory goals and management - The company aims to increase inventory turns back to the four times range, with a gradual decline in inventory anticipated [38][40] Question: Revenue growth expectations - Management refrained from providing full-year guidance but acknowledged a positive trend in the business environment [41][42] Question: Excess and obsolete inventory risks - Management indicated a significant reserve built for inventory, suggesting a safe position regarding excess and obsolete inventory [47][48] Question: Impact of BEAD program - Management stated that there is no significant impact from the BEAD program on current operations [80]