AT&T sees a big subscriber boost - and also beats on free cash flow

By Emily Bary

Company reiterates its full-year outlook

AT&T Inc. delivered a big boost in free cash flow for the first quarter, while delivering a beat on that closely watched metric.

The wireless carrier on Wednesday morning reported $3.1 billion in quarterly free cash flow, up from $1.0 billion a year before. AT&T (T) came in above the FactSet consensus view, which was for $2.4 billion.

A year ago, AT&T spooked Wall Street with a big miss on first-quarter free cash flow, which the company said at the time was related to misaligned investor expectations about the timing of free cash flow throughout the year. Since then, the company has worked to make free cash flow more predictable, though its better-than-expected performance in this year's first quarter also reflected factors like improvements in cash from operations.

The company added a net of 349,000 postpaid phone subscribers in the quarter, while analysts were expecting 287,000. Phone churn at AT&T was 0.72%.

AT&T posted 47 cents in earnings per share, down from 57 cents a year before. Adjusted earnings per share came in at 55 cents, down from 60 cents a year prior but ahead of the 53-cent consensus view.

The company reported adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) of $11.0 billion, up from $10.6 billion a year before and roughly in line with the FactSet consensus.

Revenue came in at $30.0 billion, essentially flat with what AT&T posted a year before. The FactSet consensus was for $30.5 billion. Mobility service revenue increased 3.3% while equipment revenue was down by $336 million. Investors generally pay more attention to service revenue as AT&T can lose money on equipment sales.

AT&T continues to model $17 billion to $18 billion in free cash flow for the full year as well as growth in mobility wireless-service revenue that's "in the 3% range." The company also is still looking for $2.15 to $2.25 in full-year adjusted earnings per share.

See also: Verizon's stock sees first post-earnings drop since 2022 despite subscriber beat

-Emily Bary

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04-24-24 0631ET

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