Overview

AT&T Inc. is a holding company that provides telecommunications and technology services through its subsidiaries and affiliates worldwide. The company has two main reportable segments: Communications and Latin America. The Communications segment, which accounts for around 97% of total operating revenues, provides wireless, business wireline, and consumer wireline services in the United States. The Latin America segment provides wireless service and equipment in Mexico.

Financial Performance

In 2024, AT&T’s total operating revenues were $122,336 million, a slight decrease of 0.1% from 2023. This was driven by declines in the Business Wireline and Mobility equipment businesses, partially offset by growth in Mobility service, Consumer Wireline, and Latin America revenues.

Operating income decreased 18.8% to $19,049 million in 2024, primarily due to a $4,422 million non-cash goodwill impairment charge related to the Business Wireline reporting unit. This impairment was driven by a faster-than-expected industry-wide decline in legacy services. Other factors impacting operating income included higher depreciation and amortization expenses and restructuring charges.

Income from continuing operations was $12,253 million in 2024, down 21.6% from 2023. The decrease was due to the lower operating income, partially offset by higher equity in net income of affiliates and other income.

Segment Performance

The Communications segment saw a 0.3% decline in operating revenues in 2024, with growth in Mobility and Consumer Wireline offset by a 9.9% decrease in Business Wireline. Operating income for Communications decreased 2.5% to $27,095 million, as the decline in Business Wireline offset increases in Mobility and Consumer Wireline.

The Latin America segment had a 7.6% increase in operating revenues in 2024, driven by growth in both service and equipment revenues in Mexico. Operating income for Latin America improved to $40 million, compared to a loss of $141 million in 2023.

Strengths and Weaknesses

A key strength for AT&T is its leading position in the U.S. wireless market, with 118 million subscribers at the end of 2024. The company’s investments in 5G network deployment and fiber broadband expansion position it well to meet growing customer demand for high-speed connectivity. AT&T has also made progress in improving the profitability of its Latin America operations.

However, the company faces challenges in its Business Wireline segment, which has been impacted by the industry-wide decline in legacy services. The $4,422 million goodwill impairment charge reflects the need for AT&T to further transform this part of the business. Additionally, rising costs, including higher depreciation and amortization expenses, have pressured the company’s overall profitability.

Outlook and Future Trends

Looking ahead to 2025, AT&T expects to see continued revenue growth in its wireless and broadband businesses, driven by demand for 5G and fiber services. The company plans to focus on expanding its fiber footprint and integrated wireless-fiber offerings to offset the ongoing decline in legacy Business Wireline products.

AT&T also expects to see ongoing expense pressure in 2025 from the costs associated with its 5G and fiber network deployments, as well as from general inflationary trends. However, the company believes its cost transformation initiatives and operational efficiencies, including the benefits of 5G technology, will help mitigate these pressures.

Regulatory developments will be an important factor for AT&T’s future performance. The company faces uncertainty around issues such as net neutrality rules, state-level broadband regulations, and the availability of additional wireless spectrum. Navigating this regulatory landscape will be crucial for the company’s ability to execute on its strategic priorities.

Conclusion

AT&T’s 2024 financial results reflect the company’s strengths in wireless and broadband services, as well as the challenges it faces in its legacy wireline business. While the company’s investments in 5G and fiber provide opportunities for future growth, managing costs and adapting to regulatory changes will be critical to driving improved profitability and shareholder value. Overall, AT&T remains a leading player in the telecommunications industry, but must continue to evolve its business model to capitalize on emerging trends and stay competitive in a rapidly changing market.