AT&T Inc. (NYSE:T) exceeded analyst forecasts for first-quarter wireless subscriber additions and free cash flow, showcasing robust performance driven by strategic initiatives and consumer demand for premium plans.
Pre-market trading saw AT&T shares rise by 1.5%, reflecting investor confidence in the telecom giant’s quarterly results.
Capitalizing on its 5G deployments and competitive pricing strategies, AT&T attracted budget-conscious consumers, outpacing competitors like Verizon Communications Inc. (NYSE:VZ) in the fiercely competitive U.S. market.
During the quarter, AT&T added 349,000 net monthly bill-paying wireless phone subscribers, surpassing analysts’ expectations of 286,800 additions, according to data from FactSet.
The company’s expansion of its fiber network contributed to a notable 7.7% increase in broadband revenue for the period.
John Stankey, CEO of AT&T, expressed satisfaction with the company’s performance, highlighting achievements such as a record-low first-quarter postpaid phone churn, continuous growth in consumer broadband subscribers, and improved margins in mobility and consumer wireline services.
AT&T’s free cash flow soared to $3.1 billion, more than tripling from the previous quarter and surpassing estimates of $2.53 billion, according to Visible Alpha. This robust cash flow figure is closely monitored by investors, as it influences dividend payouts from AT&T, a major dividend issuer in the U.S. market.
However, total revenue for the quarter came in slightly below expectations, at $30 billion, compared to LSEG’s forecast of $30.54 billion. This shortfall was attributed to subdued phone upgrade activity in the U.S. telecom sector, which often involves device subsidies.
Despite industry challenges, AT&T maintained relatively stable upgrade rates compared to competitors Verizon and T-Mobile, thanks to its focus on customer retention strategies. Analysts at Morningstar noted a lower first-quarter churn rate of 0.72%, indicating strong customer loyalty and satisfaction.
Verizon, which reported earnings earlier in the week, also demonstrated resilience in subscriber numbers for the quarter, benefiting from flexible plan options and bundled streaming services.
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