AT&T Q3 Earnings: Strong Postpaid Phone Adds, Adj. EBITDA Growth, $4.4B Impairment Charge And More

On Wednesday, AT&T Inc T reported third-q uarter 2024 operating revenues of $30.21 billion, down 0.5% year over year. It marginally missed the analyst consensus estimate of $30.44 billion.

The slow recovery in smartphone purchases affected the topline performance, Bloomberg reports.

Adjusted EPS of $0.60 beat the estimate of $0.57. The stock gained after the print.

Also Read: Verizon Q3 Earnings: Wireless Subs Boost with 5G Offers, $1.7B Severance Charge Hit To Profit, Reiterates Annual Outlook

As per Bloomberg, AT&T’s 403,000 postpaid phone net adds a quashed consensus of 394.6 thousand.

In the Mobility segment, AT&T clocked 617 thousand wireless net adds, including 429 thousand postpaid phone net adds.

AT&T’s mobility segment saw a postpaid churn of 0.93% versus 0.95% a year ago. 

The Consumer Wireline segment had 226 thousand AT&T Fiber net adds, falling short of the analyst consensus of 265.4 thousand due to adverse weather and work conditions in Southeast.

The company reported 135 thousand AT&T Internet Air net adds, lagging consensus of 147 thousand.

AT&T’s adjusted EBITDA of $11.59 billion was up from $11.20 billion a year ago. It spent $5.3 billion on Capex.

Net income plunged to $0.1 billion versus $3.8 billion in the year-ago quarter due to a $4.4 billion non-cash goodwill impairment associated with its Business Wireline unit.

The company generated $10.24 billion in operating cash flow (down from $10.34 billion in the year-ago quarter) and $5.095 billion in free cash flow (down from 5.182 billion last year).

Currently, AT&T’s dividend yield stands at 6.10%. Higher free cash flows could translate into shareholder returns through higher stock buybacks and dividends.

Prepaid churn was 2.73% compared to 2.78% in the year-ago quarter. Postpaid phone-only ARPU was $57.07, up 1.9% compared to the year-ago quarter.

Operating Income: Operating income was $2.12 billion versus $5.78 billion a year ago.

The mobility segment’s operating income was up 3.5% year over year to $7.00 billion, with a margin of 33.3% compared to 32.7% in the year-ago quarter.

The Business Wireline segment operating margin was (0.9)% compared to 6.7% in the year-ago quarter. The Consumer Wireline segment operating margin was 5.7% compared to 4.8% in the year-ago quarter.

FY24 Outlook: AT&T reiterated Wireless service revenue growth in the 3% range, Broadband revenue growth of 7%+, and adjusted EPS of $2.15 – $2.25 versus the $2.20 consensus.

It maintained full-year adjusted EBITDA growth in the 3% range and full-year free cash flow of $17 billion—$18 billion.

Price Action: T stock is up 3.49% at $22.25 in the premarket at the last check on Wednesday.

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