AT&T CEO Randall Stephenson may have pretty sore knees after an impressive outburst of ego stroking as the telco looks to get into the President’s good books.
Speaking during AT&T’s earnings call this week, Stephenson heaped the praise onto President Donald Trump in a display of what can only be described as ‘brown-nosing’. Trump’s unexpected rise to the White House will have a few AT&T executives worried due to the President’s objections to the Time Warner acquisition, but a bit of ego stroking here and there of the thin-skinned hotel owner may help the team ease the transaction through.
“I had the opportunity to meet with what was then the President-elect couple of weeks ago, and I got to say I was impressed. I was meeting with the CEO, it was obvious,” said Stephenson.
“And the President had a very specific agenda in terms of what he thought was critical, and that was tax reform and regulatory reform, and we spoke at length about each of those. And I would tell you that the man, the President is focused on these.”
How much influence the President now has over the completion of the deal remains to be seen, but Stephenson has seemingly put his pride aside as he takes one for the team. In other news, Vaseline and Aloe Vera sales have gone through the roof in the Dallas region.
That said, is it any surprise Stephenson is complementary of a new regime which intends to lower corporation tax? One of the Trump promises on the campaign trail was to reduce the 35% corporation tax which many American businesses supposedly pay, allowing Stephenson and his AT&T cronies to make more money. A CEO who likes the idea of paying less tax is perhaps one of the less surprising revelations of 2017.
And AT&T could do with a bit of help at the moment…
Revenues for the fourth quarter totalled $41.8 billion versus $42.1 billion in 2015. Operating expenses were $37.6 billion versus $34.6 billion, operating income was $4.2 billion versus $7.5 billion and operating income margin was 10.2% versus 17.9%. Over the course of the year, AT&T revenues increased to $163.8 billion, up 11.6% year-on-year, which on the surface seems positive though you do have to take into account this was the first full-year the $49 billion acquisition of DirecTV featured.
“2016 was a transformational year for AT&T, one in which we made tremendous progress toward our goal of becoming the global leader in telecom, media and technology,” said Randall Stephenson, AT&T Chairman and CEO. “We launched DIRECTV NOW, our innovative over-the-top streaming service. Our 5G evolution plans and improved spectrum position are paving the way for the next-generation of super-fast mobile and fixed networks.
“And we shook-up the industry with our landscape-changing deal to acquire Time Warner, the logical next step in our strategy to bring together world-class content with best-in-class distribution which will drive innovation and more choice for consumers.”
This in itself explains the potential problem Trump could cause AT&T. Like Verizon, the telco is in the process of redefining its own business focus, moving away from dependency on the wireless market and using content to generate new revenues. Time Warner gives AT&T a huge amount of content to monetize.
This isn’t just buying new revenue channels; this deal could be viewed as the lynchpin to the new strategy. Pucker up Randall.