AT&T Inc. topped free-cash-flow expectations during its latest quarter, and the company is raising its full-year outlook on the closely watched metric.
The telecommunications giant posted $5.2 billion in free cash flow for the third quarter in its Thursday morning report, exceeding the consensus view, which called for $4.8 billion. The company now expects about $16.5 billion in free cash flow for the full year, while it previously called for at least $16 billion.
Free cash flow is of key importance to AT&T
T,
investors given the company’s sizable dividend, and while management has expressed confidence in the 2023 target all year long, Wall Street had been showing a bit more caution, especially earlier in 2023 when AT&T fell short on the metric for the first quarter in a development it owed to misaligned timing expectations.
AT&T logged revenue of $30.4 billion for the latest quarter, up from $30.0 billion a year before. The FactSet consensus was for $30.2 billion.
The company posted net income attributable to common stock of $3.4 billion, or 48 cents a share, down from $6.0 billion, or 79 cents a share, in the year-earlier period. Results from the latest period reflected $600 million in severance charges and an 8-cent per-share negative impact from lower pension credits, among other factors.
Adjusted earnings per share came in at 64 cents, down from 68 cents a year before but above the 62 cents that analysts tracked by FactSet were projecting.
AT&T also recorded third-quarter adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) of $11.2 billion, up from $10.7 billion a year before and above the $11.0 billion FactSet consensus. The company now expects at least 4% growth in adjusted Ebitda for the year, versus an earlier projection of at least 3%.
The company posted 550,000 total postpaid net additions for the quarter, and it pointed to 468,000 postpaid phone net additions. Phone average revenue per user inched up 0.6% to $55.99, reflecting “pricing actions, higher international roaming and a mix shift to higher-priced unlimited plans,” according to the earnings release.
AT&T added a net of 296,000 fiber subscribers to bring its total above 8 million.