AT&T early Wednesday reported fourth-quarter earnings that missed Wall Street estimates while revenue topped. T stock fell as the AT&T earnings outlook for 2024 fell short.
Reported before the market open, AT&T earnings for the December quarter fell 11% to 54 cents on an adjusted basis. Revenue from continuing operations rose 2.2% to $32 billion.
Analysts had projected AT&T earnings of 56 cents a share on revenue of $31.5 billion, according to FactSet. A year earlier, AT&T earned 61 cents a share on revenue of $31.3.
AT&T Stock: Free Cash Flow Tops Views
AT&T reported Q4 free cash flow of $6.4 billion vs. estimates of $6.07 billion. Free cash flow growth supports AT&T's dividend.
Wireless subscriber additions came in above estimates. During the quarter, the company said it added 526,000 postpaid wireless phone customers, down from 656,000 in the year-earlier period.
According to FactSet, analysts had estimated a gain of 494,000 postpaid phone subscribers — customers with the highest monthly bills.
Verizon Communications on Tuesday reported better-than-expected wireless subscriber growth.
T Stock: 2024 Guidance
In 2024, AT&T forecast adjusted EPS in a range of $2.15 to $2.25 versus consensus estimates of $2.46. AT&T said its profit outlook includes 17 cents in higher, 7 cents in lower other income due to declines in non-cash prior service credit amortization included in pension and postretirement benefits costs, 5 cents in lower capitalized interest and 3 cents in lower adjusted equity income.
Craig Moffett, analyst at MoffettNathanson, is cautious on AT&T's 2024 outlook.
"In their commentary, management spoke reassuringly about their expectations for a stable competitive environment, bolstered by what they expect will have been a solid fourth quarter for all of the Big Three (wireless firms)," Moffett said. "Perhaps so, but we remain concerned that aggregate expectations for the industry enter 2024 at an unachievable level — consensus points to something like 7.5 million postpaid phone net additions in an industry unlikely to deliver more than 6 million or so."
On the stock market today, T stock slumped nearly 3% to close at 16.68. The telecom stock had risen 2.4% so far in 2024. T stock fell 9% in 2023.
Heading into the AT&T earnings report, shares owned a Relative Strength Rating of only 53 out of a best-possible 99, according to IBD Stock Checkup.
Follow Reinhardt Krause on X, formerly called Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
