Can Communications Segment Drive AT&T's (T) Q2 Earnings?
Zacks Investment Research | Jul 21, 2019 09:04PM ET
AT&T Inc. (NYSE:T) is slated to report second-quarter 2019 results before the opening bell on Jul 24. The company is likely to record higher operating income from the Communications segment that generates the lion’s share of total revenues.
Let’s see how things are shaping up for the upcoming announcement.
Margin Improvement
The Communications segment includes three separate business units namely, Mobility, Entertainment Group and Business Wireline. Mobility provides wireless service to consumer and wholesale subscribers throughout the United States and its territories. The Entertainment Group provides video, high-speed Internet and communications services predominantly to residential customers in the United States. Business Wireline provides communications services to more than 3 million business customers, including multinational corporations and government and wholesale customers.
During the second quarter, AT&T introduced mobile 5G services in certain areas of seven U.S. cities — Austin, Los Angeles, Nashville, Orlando, San Diego, San Francisco and San Jose. With this, the company has deployed mobile 5G services in 19 cities across the country. In partnership with key technology suppliers, AT&T has made the world's first wireless 5G data transfer over millimeter wave using standards-based, production equipment with a mobile form factor device. Further, the company’s 5G Evolution technology is now live in more than 200 markets. This is likely to improve wireless revenues in the Mobility business division.
The company has continued steady investments across the country to enhance coverage, speed and performance for residents and businesses. It has also improved critical services that support Public Safety and first responders using the FirstNet communications platform. During second-quarter 2019, AT&T began offering the Samsung (KS:005930) Galaxy S10 5G for its Business customers and 5G developers via AT&T Developer Program. This is likely to spur ongoing developments in the field of next-generation mobile communication. The fifth-generation cellular wireless technology will offer new connected experiences to subscribers as faster speed and lower latency remain core tenets. This will also drive the next industrial revolution through unparalleled mobile capabilities.
Following the completion of the latest round of telecom spectrum auction by the Federal Communications Commission – FCC Auction 102 – AT&T has emerged as the leading bidder among all participants. The company has reportedly won spectrum licenses that cover about 98% of the U.S. population, offering it a competitive advantage for seamless 5G deployment across the country. This is likely to be reflected in the upcoming results. (Read more: Earnings ESP Filter .
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