AT&T Inc. (NYSE:T) stock fell 3.04% (As on Apr 22, 11:30:47 AM UTC-4, Source: Google Finance) though the company posted a 2.5% rise in core wireless revenue for the first quarter, as the telecom giant benefited from the expansion of its fiber internet and 5G services.  The company topped Wall Street wireless subscriber growth estimates as phone giveaways continue to fuel customer gains, giving the company a favorable start as it parts with its media business and returns to its roots as a telecom giant.

The Dallas, Texas-based firm, whose WarnerMedia unit completed its merger with Discovery Inc earlier this month to form the new media firm Warner Bros. Discovery, added 691,000 monthly phone subscribers during the quarter. The company’s revenue for the core wireless business rose to $29.7 billion in the first quarter from $29 billion a year earlier. Total revenue, however, was down more than 13%, reflecting the impact of its divested satellite TV business and weakness in its business wireline unit. The company reported that HBO and HBO Max, now part of Warner Bros. Discovery, have a total of 76.8 million subscribers worldwide, up 3 million last quarter. In the U.S., HBO and HBO Max have 48.6 million customers. Analysts expected domestic subscribers to be 48.8 million. The average U.S. HBO monthly bill was $11.24. Net income attributable to common stock fell to $4.8 billion from $7.5 billion, a year earlier.

T in the first quarter of FY 22 has reported the adjusted earnings per share of 63 cents, beating the analysts’ estimates for the adjusted earnings per share of 59 cents. AT&T’s free cash flow fell to $700 million from $4.2 billion a year earlier, a number that included $1.8 billion payment from DirecTV. The company is using cash to spend heavily on its 5G network buildout and says it still expects to generate $16 billion in free cash flow this year. The company also reiterated its forecast for $20 billion in cash flow next year. Net debt grew to $169 billion in the first quarter from $156.2 billion in the fourth quarter. The company received $40 billion in the Discovery merger to use toward debt reduction. Operating income was $5.6 billion versus $7.7 billion in the year-ago quarter reflecting the divestitures.

Moreover, capital expenditures were $4.7 billion in the quarter. Capital investment totaled $6.3 billion, which includes $1.6 billion of cash payments for vendor financing.