Shares of AT&T (T) gained in trading even as the company reported mixed Q3 results. The telecommunication giant’s adjusted earnings declined by 6.3% year-over-year to $0.6 per share, which was above consensus estimates of $0.57 per share.
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AT&T’s Mobility Service Revenues Grew in Q3
Shifting to its revenue performance, the company saw a 0.5% year-over-year decline, bringing total revenues to $30.2 billion, missing Street estimates of $30.5 billion. However, its mobility service revenues increased by 4% year-over-year to $16.5 billion, making up more than half of AT&T’s total revenues for the quarter.
AT&T Gains More-than-Expected Wireless Subscribers in Q3
Moving to its subscriber growth, AT&T exceeded expectations in the third quarter, adding 403,000 net monthly bill-paying subscribers, surpassing estimates of 393,430. This increase was driven by strong demand for its higher-tier unlimited plans, which offer perks like increased hotspot data.
Furthermore, the demand for AT&T’s discounted bundles, combining high-speed fiber with wireless service, also surged, with 40% of fiber users choosing wireless plans. Additionally, the company’s postpaid phone churn rate remained low at 0.78%, aided by attractive smartphone promotions.
AT&T Announces Dividend
Moving to the dividend front, the company announced a quarterly dividend of $0.2775 per share on the company’s common stock and its Series A and Series C preferred stock. The dividend payable on the company’s 5.000% Perpetual Preferred Stock, Series A is $312.50 per preferred share, and the dividend payable on its 4.750% Perpetual Preferred Stock, Series C is $296.875 per preferred share.
Moreover, the dividends on common stock and Series A and Series C preferred stock are payable on November 1 to stockholders of record of the respective shares at the close of business on October 10, 2024.
AT&T Reiterates FY24 Outlook
Looking ahead, the company expects its wireless service revenues to grow by 3% year-over-year while broadband revenues are likely to rise by 7% year-over-year. Adjusted earnings are forecasted to be between $2.15 and $2.25 per share, compared to analysts’ estimates of $2.20 per share.
Is AT&T a Buy, Hold, or Sell?
Analysts remain cautiously optimistic about T stock, with a Moderate Buy consensus rating based on nine Buys and five Holds. Over the past year, AT&T has increased by more than 45%, and the average AT&T price target of $21.85 implies an upside potential of 1.6% from current levels. These analyst ratings are likely to change following AT&T’s results today.
