AT&T early Wednesday reported second-quarter earnings that topped estimates while revenue growth missed. T stock wavered as free cash flow, a key metric, beat Wall Street targets.
AT&T said free cash flow came in at $4.2 billion vs. estimates of $3.66 billion. Free cash flow growth supports AT&T's dividend. Higher interest rates have been problematic for dividend paying stocks, such as AT&T.
"AT&T is still well behind the halfway mark on their way to their $16 billion guidance for the full year. But the pacing is clearly better than in Q1," SVB MoffettNathanson analyst Craig Moffett said in a note to clients. "Overall, the company expects about $11 billion in free cash flow for the remainder of the year, weighted toward the fourth quarter."
Reported before the market open, adjusted earnings for the June period came in at 63 cents, down 3% from a year earlier. Revenue from continuing operations edged up 0.9% to $29.9 billion.
Analysts had projected AT&T earnings of 60 cents a share on revenue of $30 billion, according to FactSet. A year earlier, AT&T earned 65 cents a share on revenue of $29.6 billion from continuing operations.
On the stock market today, T stock wavered before ending the session 0.6% higher to 14.89. AT&T stock had retreated 19% in 2023 as of Tuesday's market close.
T Stock: Free Cash Flow Beats
During the quarter, the company said it added 326,000 postpaid wireless phone customers, down from 800,000 in the year-earlier period. AT&T had lowered expectations for second-quarter subscriber additions at a financial conference in June.
According to FactSet, analysts had estimated a gain of 342,000 postpaid phone subscribers.
Heading into the AT&T earnings report, shares owned a Relative Strength Rating of only 14 out of a best-possible 99, according to IBD Stock Checkup.
On Tuesday, Verizon Communications reported better-than-expected earnings and wireless subscriber gains, but fell short on revenue.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
