AT&T CEO Opens Up About Trump Meeting And Tax Reform
Telecom giant AT&T held its Q4 2016 earnings call on Wednesday evening, and its CEO expressed optimism that the carrier could show more growth if the regulatory environment were right, following his meeting with President Donald Trump earlier this month.
Randall Stephenson, AT&T's chairman and CEO said that the meeting with Trump, then President-elect, covered tax reform and telecommunications regulations, noting that it was "obvious that I was meeting with a CEO."
"I will tell you that the president is focused on [regulatory and tax reform]. I left with a degree of optimism that this could really be pulled off this year," Stephenson said. "If we were to get off of this 1 to 2 percent growth plane, there's nothing that will trigger this more than tax reform."
During a media call following AT&T's meeting with the then President-elect, the carrier said that its large-scale merger plans were not discussed. AT&T in October agreed to buy media and entertainment powerhouse Time Warner Inc. for $85.4 billion, a matchup that Trump, then a presidential candidate, vowed to block, citing it would put "too much power in the hands of too few."
AT&T has been getting ready for the intersection of mobile technology and premium video content, Stephenson said. He added that AT&T's network is a great foundation for Time Warner's assets.
Stephenson said that the carrier is optimistic that the Federal Communications Commission's new leader, Ajit Pai, will begin to "bring clarity and some level of predictability" to the regulatory environment.
"No one thinks regulation should go away – customers still need protection and safety, but we've had regulation that is … interfering with how you think about designing products and how you enter new markets," he said.
In the quarter ending December 31, AT&T's Business services saw a 1 percent decrease, slipping from $18.21 billion in Q4 2015 to $18.03 billion during the fourth quarter of 2016. For the full year, Business services also declined modestly in 2016 to $70.99 billion, down from $71.13 billion in 2015. John Stephens, AT&T's senior executive vice president and CFO attributed the decline to the continuing shift to wireless and strategic IT services.
Wireless services revenues grew in the fourth quarter to $7.98 billion, up from $7.68 billion in the same year-ago period. Legacy voice and data services, however, decreased year-over-year, dropping from $4.39 billion in Q4 2015 to in $3.79 billion in Q4 2016.
Stephenson said that its strategic IT business solutions now make up 38 percent of its wireline business revenues.
The carrier's revenue for the year grew by 11.6 percent. AT&T reported $164 billion revenue for 2016, up from $146.80 billion in 2015.
AT&T reported $41.84 billion in revenue during its fourth quarter, down from $42.12 billion in the year-ago quarter. Overall, the Dallas-based carrier's Q4 2016 revenue number was just shy of the $42.04 billion expected by Wall Street analysts.
AT&T's diluted earnings per share dropped in 2016's final quarter to 39 cents a share, down from 65 cents a share in Q4 2015. The carrier posted net income of $2.44 billion during Q4 2016, down from $4.01 billion in Q4 2015.