AT&T is yet to formally publish its official fourth quarter earnings report for 2015. However, Wells Fargo Securities has already made some predictions (and even recently adjusted its estimates) regarding the latest quarter performance figures for the second biggest wireless carrier in the United States. According to Wells Fargo, AT&T will report fewer additions of postpaid subscribers compared to what was previously estimated, on account of less aggressive promotional efforts than what the wireless carrier had managed in the last few years. Wells Fargo, however, forecasted that AT&T will post higher EBITDA margins (earnings before interest, tax, depreciation, and amortization).
Wells Fargo further estimated that for the final quarter of 2015, AT&T will post 800,000 net additions of tablet subscribers, but will suffer a net loss of 300,000 phone subscribers, totalling 500,000 overall net additions. The fewer net additions will mean that the resulting EBITDA margins will be at 43.8 percent, which is an improvement over the 42.7 percent that was previously predicted by Wells Fargo.
With regards to revenues, Wells Fargo estimates that AT&T’s earnings from wireless services will amount to $15.1 billion, which has increased 0.4 percent compared to the same quarter in 2014. Equipment revenue will be down though to $4.6 billion, which has decreased 4.5 percent year after year. Wells Fargo further predicted that postpay upgrade rate will be at 8.75 percent (decreasing 11.3 percent year after year), due to equipment installment plans (EIPs) continuing to contribute to lesser AT&T subscribers opting to upgrade for the final quarter of 2015. In other words, more people on EIPs are holding on to their handsets longer.
Wells Fargo also made special mention of AT&T’s recent launching of unlimited data plans for DirecTV subscribers, and is expecting consumers to find the resurrected plans appealing. It is also expected that the wireless carrier will continue to make the most out of its acquisition of DirecTV, which should mean more promotions and features are coming this year.
This appear to be consistent with what Randall Stephenson, chief executive officer of the wireless carrier, has stated last month, that AT&T is readying to launch new offers and services this January, meaning that it does have plenty more in store for 2016 other than the new unlimited data plans. This will likely include features that try to bundle both wireless services and TV services.
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