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Daily Updates | AT&T Surpasses Earnings Expectations and Ups Free Cash Flow Guidance in Impressive Q3 Report

AT&T Surpasses Earnings Expectations and Ups Free Cash Flow Guidance in Impressive Q3 Report

AT&T Reports Better

AT&T's third-quarter results have shown improvement in its subscriber growth and generation of free cash flow while steadily increasing profits. The company's income from continuing operations for the third quarter has fallen to $3.8 billion or 64 cents per diluted share, compared to $6.3 billion in the year-ago quarter. Revenue has increased by 1% year-over-year to $30.4 billion on efforts to expand the company's 5G offerings and broadband.

468,000 new postpaid phone subscribers for the third quarter have been reported, up roughly 43% from the prior quarter but down about 30% from the same period a year ago.

The company has managed to maintain historically low churn rates and has seen a steady rise in average revenue per user (ARPU) due to the growth of broadband and mobility revenues. 

As a result, the company anticipates a full-year free cash flow of approximately $16.5 billion, higher than the previously estimated $16 billion.

"Our investments in best-in-class 5G and fiber connectivity fuel our growth engine. We're gaining advantageous customer relationships and becoming more efficient. This is powering our robust business performance and giving us the confidence to raise our full-year free cash flow guidance," said John Stankey, AT&T CEO. 

"We are delighted that customers are choosing AT&T and staying with us over the long run as we connect and streamline their digital world."

Sustainable Strategies Adopted 

  1. 468,000 postpaid phone net adds were delivered with continuing strong ARPU growth and historically low churn levels. 
  2. Mobility service revenues have risen to 3.7%, achieving the company's best-ever operating income. 
  3. 296,000 AT&T Fiber net have been added.
  4. Consumer broadband revenues are up 9.8%, driven by AT&T Fiber revenue growth of 26.9%.
  5. 8 million AT&T Fiber subscribers have been surpassed, doubling the customer base in less than four years.
  6. AT&T Internet Air fixed wireless residential service has been launched; it is expected to be in 30+ locations by the end of the year.

A Leading Investor in America's Broadband Infrastructure

  1. Continued to enhance the largest wireless network in North America1 and expand the most reliable 5G network1 as they scale their 5G standalone; Mid-band 5G now covers more than 190 million people and is expected to reach 200 million or more by year-end.
  2. Grew the nation's largest consumer fiber network, which can now serve 20.7 million consumers and about 3.3 million business customer locations; on track to pass 30 million+ fiber locations by the end of 2025.
  3. Direct 5G voice call between unmodified smartphones via satellite.

Communications Operational Highlights

Third-quarter earnings were $29.2 billion, up 0.4% yearly due to Mobility and Consumer Wireline increases, which offset a decline in Business Wireline. Operating income was $7.3 billion, up 4.1% annually, with an operating income margin of 24.9%, compared to 24.0% in the year-ago quarter.


Key Takeaways 

  • AT&T reported better-than-expected earnings for Q3 2023, as revenue rose 1% to $30.4 billion.
  • The company raised its full-year guidance for free cash flow to $16.5 billion.
  • Q3 postpaid wireless subscriber additions rose 43% compared to the prior quarter but are significantly lower than the year-ago quarter.