AT&T early Wednesday reported first quarter earnings that fell from a year earlier but topped estimates. Revenue slightly missed. AT&T stock rose as wireless subscriber and free cash flow growth beat expectations.
Reported before the market open, AT&T earnings for the March quarter were 55 cents on an adjusted basis, down 8% from a year earlier. Revenue from continuing operations fell 0.5% to $30 billion.
Analysts had projected AT&T earnings of 53 cents a share on revenue of $30.5 billion, according to FactSet. A year earlier, AT&T earned 60 cents a share on revenue of $30.1 billion from continuing operations.
On the stock market today, AT&T stock rose 1.9% to close at 16.81.
"Results in the quarter are encouraging and we expect will be well-received," said Evercore ISI analyst Vijay Jayant in a report. "Management reaffirmed its 2024 outlook which includes wireless service revenue growth of 3%, broadband revenue growth of 7%, adjusted EBITDA growth of 3% and free cash flow of $17 billion to $18 billion."
Heading into the AT&T earnings report, shares were down 2% in 2024 and 10% from a year earlier.
Free Cash Flow Beats
AT&T said first-quarter free cash flow came in at $3.1 billion vs. estimates of $2.4 billion. Free cash flow growth supports AT&T's dividend.
Also, the company said it added 349,000 postpaid wireless phone customers during the quarter vs. Wall Street estimates for a 287,000 gain.
AT&T added 424,000 postpaid phone subscribers in the year-earlier period. Subscriber growth has slowed for T-Mobile US and Verizon Communications as well.
Meanwhile, fewer AT&T wireless subscribers are switching to other service providers.
"Total post-paid churn of 0.89% was fully 10 basis points better than last year and 12 basis points lower than consensus estimates," said Craig Moffett, analyst at MoffettNathanson in a report. "That might be the biggest beat in churn we've ever seen."
Meanwhile, AT&T in February offered a $5 credit to each customer impacted by a major wireless services outage. The company said the outage was caused by a network software upgrade.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
