Shares of AT&T (T) gained in pre-market trading after the company reported mixed results for its second quarter of FY24, although its wireless phone subscribers surpassed estimates. The company added 419,000 postpaid phone wireless subscribers in the second quarter, exceeding the consensus estimate of 284,800. AT&T’s competitively priced unlimited plans attracted budget-conscious customers, leading to a postpaid phone churn of 0.70%, the second lowest churn for the second quarter.
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The telecom giant reported adjusted earnings of $0.57 per share, which aligned with analysts’ consensus estimates.
AT&T’s Revenue Breakdown in the Second Quarter
The company generated revenues of $29.8 billion, down by 0.4% year-over-year, compared to analysts’ expectations of $29.98 billion.
Overall, AT&T’s mobility business generated operating revenues of $20.5 billion, up by 0.8% year-over-year, with operating income of $7 billion, a decline of 2.4% year-over-year. The mobility business is part of AT&T’s communications segment, which comprises more than 90% of the company’s revenues.
Furthermore, AT&T’s free cash flow rose by over 9% to $4.6 billion, beating estimates of $4.22 billion.
AT&T’s FY24 Outlook
Looking forward, management reiterated its FY24 outlook and expects its wireless services revenue to grow by 3% year-over-year, with broadband revenues likely to increase by 7% year-over-year. AT&T has projected adjusted EBITDA to rise by 3% year-over-year, while adjusted earnings are likely to be between $2.15 and $2.25 per share. For reference, analysts expect earnings to be $2.21 per share.
Is AT&T Stock a Buy, Sell, or Hold?
Analysts remain cautiously optimistic about T stock, with a Moderate Buy consensus rating based on 11 Buys and four Holds. Over the past year, AT&T has increased by more than 25%, and the average T price target of $21.71 implies an upside potential of 19.2% from current levels. These analyst ratings are likely to change following AT&T’s second-quarter results today. These analyst ratings are likely to change following AT&T’s Q2 results today.
