at&t-stock-falls-as-telecom-lowers-free-cash-flow-outlook

AT&T Stock Falls As Telecom Lowers Free Cash Flow Outlook

AT&T stock slipped Thursday after the telecom company added more wireless postpaid phone subscribers than expected in the June quarter but lowered its full-year free cash flow outlook.

X

AT&T earnings excluded WarnerMedia, spun off in early April, and DirecTV. AT&T (T) said second-quarter adjusted earnings from continuing operations were 65 cents, down 11% from a year earlier. Revenue for T stock fell 17% to $29.6 billion.

Analysts had projected AT&T earnings of 61 cents a share on revenue of $29.5 billion, according to Factset. A year earlier, AT&T stock earned 73 cents a share on revenue of $44 billion. AT&T said its adjusted profit from just stand-alone operations —excluding the WarnerMedia and DirecTV units — were 64 cents a year earlier.

AT&T stock slipped 1.9% to near 20 in early trading on the stock market today.

AT&T Stock: Free Cash Flow Outlook Lowered

Also, AT&T said it added 813,000 postpaid wireless phone customers vs. estimates for a 562,000 gain. AT&T wireless service revenue climbed 5.2% to $19.9 billion versus estimates of $19.7 billion.

Earnings before interest, taxes, depreciation and amortization, or EBITDA, rose 2.5% to $8.2 billion.

Free cash flow generated from continuing operations in Q2 was $1.4 billion amid higher capital spending, the company said.

AT&T lowered its full-year free cash flow guidance to a $14 billion range from a $16 billion range.

In the earnings release, AT&T said: “This outlook reflects the expectation of lower vendor device payments by more than $3 billion, approximately $2 billion in lower capital investment, benefits from first half of the year customer growth, which include recent price increases, and lower cash interest payments.”

AT&T added: “We expect these benefits to be partially offset by reduced distributions from DirecTV and our expectations for some incremental pressure on cash collections.”

T Stock Up In 2022

In addition, AT&T stock had climbed 10% thus far in 2022.

Heading into the AT&T earnings report, the telecom stock owned a Relative Strength Rating of  91, according to IBD Stock Check-up. Also, T stock had neared an entry point of 21.49 from a cup-with-handle base.

WarnerMedia merged with Discovery in early April. The new media company is called Warner Brothers Discovery (WBD).

AT&T cut its annual dividend by 46% to $1.11 per share because of the WarnerMedia spinoff. Still, AT&T offers a dividend yield of 5.43%.

Also, AT&T spun off DirecTV to TPG Capital in August 2021.

If you’re new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one key to the investment guidelines.

Follow Reinhardt Krause on Twitter @reinhardtk_tech   for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

YOU MAY ALSO LIKE:

Stock Market Comeback Continues As Bulls Catch Bears; Netflix Boosts This Group

Bear Market News And How To Handle A Market Correction

Best Growth Stocks To Buy And Watch: See Updates To IBD Stock Lists

Chart Reading For Beginners: Nvidia, Amazon, Pinterest Reveal This Key Investing Skill

 » Read More  » Read More

Tags: No tags

Comments are closed.