AT&T early Thursday reported third-quarter earnings and revenue that topped estimates while wireless subscriber additions came in above expectations. T stock rose as free cash flow, a key metric, beat Wall Street targets.
Reported before the market open, AT&T earnings for the September quarter fell 6% to 64 cents. Revenue from continuing operations climbed 1% to $30.35 billion.
Analysts had projected AT&T earnings of 62 cents a share on revenue of $30.2 billion, according to FactSet. A year earlier, AT&T earned 68 cents a share on revenue of $30 billion from continuing operations.
AT&T Stock: Free Cash Flow Grows
AT&T reported Q3 free cash flow of $5.2 billion, up 33% vs. estimates of $4.78 billion. Free cash flow growth supports AT&T's dividend. AT&T increased its full-year free cash flow guide to $16.5 billion, up from $16 billion.
On the stock market today, T stock climbed 6.6% to close at 15.26. The telecom stock had retreated 21% heading into the AT&T earnings report.
During the quarter, the company said it added 468,000 postpaid wireless phone customers, down from 708,000 in the year-earlier period. According to FactSet, analysts had estimated a gain of 403,000 postpaid phone subscribers – customers with the highest monthly bills.
"AT&T's strong consumer wireline result, and solid margin performance in mobility, were enough to more than offset these weak results in business wireline, leading to a relatively good consolidated result, least in EBITDA (earnings before interest, taxes. depreciation and amortization) growth," said Craig Moffett, analyst at MoffettNathanson in a report.
Heading into the AT&T earnings report, shares owned a Relative Strength Rating of only 39 out of a best-possible 99, according to IBD Stock Check-up.
Verizon Communications reports Q3 results on Oct. 24. T-Mobile US follows on Oct. 25. T-Mobile has regained the lead over AT&T stock in adding the most wireless postpaid subscribers quarterly.
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