AT&T Inc. (NYSE:T) stock rose 2.86% (As on April 21, 11:26:19 AM UTC-4, Source: Google Finance) after the company missed Wall Street estimates for its first-quarter revenue, signaling intense competition from deep-pocketed rivals Verizon Communications Inc and T-Mobile US Inc. AT&T added 424,000 postpaid phone subscribers in the latest quarter, above Factset estimate of 422,800 additions. The wireless carrier’s discounted offers and cheaper plans helped it lure more cost-conscious customers in a highly competitive market. For the quarter ended March 31, AT&T reported net income of $4.18 billion, compared with $4.76 billion, a year earlier. The carrier’s operations produced $1 billion in free cash flow, which was below analyst estimates. Income from continuing operations was $4.5 billion, or 57 cents per share, in the quarter, compared with $5.1 billion, or 65 cents per share, a year earlier.
Moreover, Cash from operating activities from continuing operations was $6.7 billion, down nearly $1 billion year over year reflecting timing of working capital, including lower securitizations. Capital expenditures were $4.3 billion in the quarter versus $4.6 billion in the year-ago quarter. Capital investment*, which includes $2.1 billion of cash payments for vendor financing, totaled $6.4 billion. Free cash flow* was $1.0 billion for the quarter. Total debt was $137.5 billion at the end of the quarter, and net debt* was $134.7 billion. The company continues to expect to achieve a net debt-to-adjusted EBITDA* ratio in the 2.5x range by early 2025.
T in the first quarter of FY 23 has reported the adjusted earnings per share of 60 cents, beating the analysts’ estimates for the adjusted earnings per share of 59 cents. The company had reported the adjusted revenue growth of 1.4 percent to $30.14 billion in the first quarter of FY 23, missing the analysts’ estimates for revenue of $30.27 billion. AT&T said the growth was also driven by higher revenue in broadband services, partly offseting lower equipment sales. The adjusted operating income was $6.0 billion versus $5.8 billion in the year-ago quarter.
Further, Mobility Revenues were up 2.5% year over year to $20.6 billion due to higher service revenues, partially offset by lower equipment revenues. Service revenues were $15.5 billion, up 5.2% year over year, primarily driven by subscriber and postpaid ARPU growth. Equipment revenues were $5.1 billion, down 4.7% year over year, driven by lower volumes. Business Wireline Revenues were $5.3 billion, down 5.5% year over year due to lower demand for legacy voice and data services and product simplification, partly offset by growth in connectivity services.