AT&T Shares Gain After Q3 Earnings, HBO Strength, Robust Full Year Outlook

AT&T Inc T reported third-quarter operating revenues of $39.92 billion, down 5.7% year-over-year, beating the consensus of $39.14 billion. WarnerMedia revenue growth partially offset the Business Wireline revenue decline.

Adjust EPS of $0.87 grew 14.5% Y/Y, beating the consensus by $0.09.

In the Mobility segment, AT&T clocked 928 thousand postpaid phone net adds, 1.22 million postpaid net adds, and 249 thousand prepaid phone net adds. It saw a Postpaid phone churn of 0.72%, which increased from 0.69% in Q2.

The penetration was about 37% in the Consumer Wireline segment, with 289 thousand AT&T Fiber net adds.

In the WarnerMedia segment, total revenues jumped 14.2% Y/Y to $8.4 billion. Total global HBO Max and HBO subscribers grew by 12.5 million Y/Y to 69.4 million, and Domestic HBO Max and HBO subscribers increased 7.1 million Y/Y to 45.2 million, with a Domestic ARPU of $11.82.

AT&T's Q3 adjusted EBITDA of $13.01B beat the consensus of $12.97B.

The company generated $9.87 billion in Q3 operating cash flow, down 18.6% Y/Y, and a free cash flow of $5.2 billion. It ended Q3 with $21.3 billion in cash and equivalents and $179.2 billion in total debt.

AT&T's operating income jumped 15.9% Y/Y to $7.11 billion as Broadcast, programming, and operations costs fell 31.3%. It clocked an adjusted operating margin of 21.07%

The company spent $4.7 billion on Capex and paid $3.75 billion in dividends.

Outlook: AT&T now expects full-year adjusted EPS to be at the high end of the low- to mid-single-digit growth range versus just low- to mid-single growth previously.

The company forecasts full-year free cash of approximately $26 billion and HBO Max/HBO global subscriber target of 70-73 million subscribers.

Price Action: T shares are up 1.31% at $26.25 premarket on the last check Thursday.

Photo by Tdorante10 via Wikimedia