AT&T Inc. reported better-than-expected Q3 earnings on Thursday, with adjusted earnings of $0.64 per share, a decrease of 5.9% year-on-year (YoY), but surpassing the consensus estimate of $0.63 per share. The telecom giant's revenues climbed by 1.2% to $30.35 billion, exceeding the projected $30.04 billion.
The company's free cash flow reached $5.2 billion, marking a quarterly rise of $1 billion due to aggressive cost-cutting efforts. In Q3, AT&T gained approximately 468,000 post-paid wireless and 296,000 new fiber optic subscribers, largely driven by aggressive moves to attract Apple (NASDAQ:AAPL) iPhone customers.
CEO John Stankey announced an upwards revision for both full-year free cash flow and profit growth forecasts. AT&T now expects approximately 4% growth in adjusted earnings compared to 2022 and anticipates free cash flow to reach around $16.5 billion, up by $500 million from the previous forecast. This aligns with the InvestingPro Tip that the company's net income is expected to grow this year, and 5 analysts have revised their earnings upwards for the upcoming period.
Stankey attributed these positive forecasts to profitable customer relationships, investments in best-in-class 5G and fiber connectivity, and company efforts to simplify customers' digital experiences. This is consistent with AT&T's position as a prominent player in the Diversified Telecommunication Services industry, as pointed out by InvestingPro Tips.
Following the earnings announcement on Thursday, AT&T's shares rose by 3.35% in pre-market trading, indicating an opening bell price of $14.80 each. The InvestingPro Data shows that the company has a market cap of 108.96B USD, and the P/E Ratio (Adjusted) for LTM2023.Q2 stands at 6.89, indicating a positive valuation for the company.
The company's revenue for LTM2023.Q2 was 121.44B USD, with a gross profit of 71.51B USD, representing a Gross Profit Margin of 58.89%. This data underlines AT&T's strong financial performance and potential for growth.
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