AT&T’s core cellphone business experienced steady growth in the third quarter, resulting in increased revenue and prompting the company to raise its full-year outlook for free cash flow. Although AT&T shares have declined by about 22% this year, they rose nearly 4% to $14.85 in premarket trading.
Impact of Restructuring
AT&T’s quarterly earnings were impacted by severance and restructuring charges due to the ongoing consolidation of offices, which is part of the company’s cost-cutting plan.
Earnings Highlights
- Revenue: Third-quarter revenue increased 1% to $30.4 billion, exceeding the $30.21 billion expected by Wall Street analysts (according to FactSet).
- Adjusted Profit: Adjusted earnings amounted to 64 cents per share, surpassing the estimated 62 cents per share.
- Free Cash Flow: AT&T achieved a third-quarter free cash flow of $5.2 billion, up from $3.8 billion in the previous year.
- Positive Outlook: AT&T is confident in achieving approximately $16.5 billion in free cash flow for the year, surpassing its previous outlook of at least $16 billion.
AT&T’s positive performance in the third quarter sets an optimistic tone for the telecommunications industry. Verizon and T-Mobile are set to announce their own updates next week.