January 29, 2023

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T Stock: AT&T Earnings, Top Free Cash Flow Estimates for the Full Year

T Stock: AT&T Earnings, Top Free Cash Flow Estimates for the Full Year

AT&T (tEarly Wednesday, it reported fourth-quarter earnings that beat estimates while revenue came in just short of Wall Street targets. T stock popped up, moving into buy territory, as its full-year free cash flow was weighed down by the company’s own outlook.




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AT&T’s earnings were reported before market open, excluding WarnerMedia, in early April 2022. The communications giant said adjusted earnings for the fourth quarter from continuing operations were 61 cents, up 9% from a year earlier. Revenue from continuing operations rose 0.8% to $31.3 billion.

Analysts expected AT&T earnings of 57 cents per share on revenue of $31.4 billion, according to FactSet. A year ago, AT&T took a 56 cent share of $40.96 billion in revenue, but that included sales from discontinued operations.

T Stock: Free Cash Flow Forecast for 2023

In addition, AT&T reported free cash flow for the full year of $14.1 billion, beating analyst estimates of $13.78 billion. AT&T projected free cash flow of $14 billion. In the fourth quarter, AT&T generated $6.1 billion in free cash flow, beating estimates of $5.37 billion.

For fiscal 2023, AT&T projected free cash flow of $16 billion against Wall Street estimates of $16.2 billion. Free cash flow growth Supports AT&T dividends.

“We view AT&T’s reasonably conservative guide to 2023 FCF of $16 billion, including $24 billion in capital spending, as the key takeaway for print,” Well Fargo analyst Eric Lobshaw said in a report.

He added, “With projections of ‘$16 billion or better’, AT&T has put out a guide that we believe is suitably conservative – with upside potential – that includes EBITDA growth. Capital spending is projected to moderate in 2024 and beyond. More importantly, Of that, this implies a dividend payout ratio of just over 50%, which provides a great deal of financial flexibility.”

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The telecom said it expects 2023 adjusted earnings of $2.40 per share in the middle of its forecast. This includes a negative impact of 25 percent from higher interest rates and taxes. Also, T stock analysts expected 2023 earnings of $2.56 per share and revenue of $122.8 billion.

AT&T has not provided revenue forecasts for 2023.

On the stock market todayT shares rose 6.3% to 20.36 in morning trade. The stock has an entry point at 19.62.

The most important views for postpaid phone subscribers

The company also said it added 656,000 postpaid wireless postpaid phone customers during the quarter versus an estimate of a gain of 645,000.

But AT&T added 280,000 fiber broadband subscribers, missing analysts’ opinions of 330,000 subscribers.

T stock is up 4% so far this year ahead of the earnings report. Heading to AT&T’s earnings report, the stock has a relative strength rating of 62 out of the best possible 99, according to IBD stock check.

WarnerMedia spun off and merged with Discovery in early April 2022. The new media company is named Warner Bros. Discovery (WBD). WBD stock has gained 40% in 2022.

Follow Reinhardt Krause on Twitter @tweet For updates on 5G wireless networks, artificial intelligence, cybersecurity, and cloud computing.

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