Quarterly earnings round-up – AT&T, AMD, Juniper and America Movil

AT&T misplaces quite a lot of customers, AMD warns of a poor Q4, Juniper profitability slides and America Movil feels impact of natural disasters.

AT&T needs to figure out the TV business

Looking at the positives, AT&T’s DirecTV Now proposition, its answer to the cord-cutting trend, brought in 296,000 net adds over the quarter, the most successful period to date, though this number was dwarfed by the 385,000 traditional pay-TV subs who made their way to the exit.

The team warned us in a SEC filing last week this might be the case, but it is now official. The cost of subscriptions are smaller and the number of subscribers are getting smaller as well. The TV space is not treating AT&T as nicely as it had hoped.

Over the course of the third quarter, AT&T brought in total revenues of $39.7 billion (compared to $40.9 billion in the same quarter of 2016) and net income attributable to AT&T totalled $3 billion (compared to $3.3 billion in 2016). The top-line figures are not ideal, though this has primarily been blamed on legacy voice and data services.

“We continued to operate our business efficiently in the quarter,” said CEO Randall Stephenson. “At a time of transformation in our wireless and video businesses, as well as investment in growth opportunities, we’re able to maintain our full-year guidance.”

AMD returns to profit but warns of shaky Q4

Semiconductor business AMD might have put a smile on investors faces by reporting a profit in Q3, but warnings of a weaker Q4 saw share price drop 10% in afterhours trading.

The Ryzen and Epyc series processors, which we both launched earlier this year, proved to be a strong success for the team, as operating profit was reported for the first time in three years. Bringing in $1.64 billion in total revenues, an increase of 26% from 12 months ago, is certainly a positive sign, and so is net income of $71 million. The latter figure actually compares to a loss of $406 million in Q3 2016, so this is certainly heading in the right direction.

“Strong customer adoption of our new high-performance products drove significant revenue growth and improved financial results from a year ago,” said. Lisa Su, AMD CEO. “Our third quarter new product introductions and financial execution mark another important milestone as we establish AMD as a premier growth company in the technology industry.”

Revenues for the quarter were up 34% sequentially, but it appears this isn’t going to be a lasting trend. AMD predicts a 15% decrease in revenues for the next three months, though this can be put down to some levelling off of cryptocurrency demand for GPUs, while seasonally the next quarter is the weakest for some areas of the semiconductor business. This explanation was not enough to save the AMD share price however.

Juniper slides down the profitability slide

Juniper announced a profit for the quarter, though it has lost ground on the same period in 2016. A decline in share price might indicate disappointment from the market, which has seen Juniper demonstrate year-on-year growth for the first two quarters of the year, but the team wasn’t able to repeat the performance a third time.

Net revenues were $1.257.8 billion, a decrease of 2% year-on-year, while net income stood at $174.4 million, an increase of 1%, but this wasn’t enough to save face.

“While we are disappointed in our third quarter revenue results which were impacted by timing of switching deployments, we have made significant progress on executing on our cloud strategy,” said CEO Rami Rahim.

“Despite lower than anticipated revenue growth impacting third quarter results, we have still been able to manage costs effectively,” said CFO Ken Miller.

To maintain revenues amidst a slight repositioning in the market is not a bad effort by the team, though a forecast of $1.23 billion for the final quarter of the year was seemingly not what the market wanted to hear; Juniper shares fell 6.6% during the afterhours trading period.

America Movil spreadsheet shook by natural disasters

The numbers at America Movil look relatively solid for the third quarter of 2017, but that wasn’t enough to prevent billionaire Carlos Slim’s flagship business slipping into a loss.

Postpaid wireless subscribers grew 6% year-on-year, while the broadband subscriptions increased by 5%, but total revenues declined 2.2% to roughly $12.7 billion, making a loss of roughly $500 million. During the same period of 2016, the team brought in a profit of around $110 million.

That said, it might not be the worst news. Revenues and profits were hit by numerous natural disasters in Mexico, Puerto Rico and the US, while a costly Colombian arbitration panel ruling are unlikely to feature again over the next couple of quarters. Without this legal spat, America Movil said it would have registered a profit.

A loss is never good news, but considering these are individual events, the outlook is certainly a bit more positive. The peso’s depreciation might be something to keep an eye on, but keep your hand away from the red button for the moment.