Why Is Telecom Giant AT&T Stock Down Today?

AT&T Inc T reported fiscal fourth-quarter 2023 operating revenues of $32.02 billion, up 2.2% year-over-year, beating the consensus of $31.48 billion. 

Adjusted EPS of $0.54 missed the consensus of $0.56.

The results reflected higher Mobility, Mexico, and Consumer Wireline revenues, partly offset by lower Business Wireline revenues.

In the Mobility segment, AT&T clocked 5.9 million wireless net adds, including 526 thousand postpaid phone net adds. Verizon Communications Inc VZ clocked 449 thousand postpaid phone net adds.

The Mobility segment saw a Postpaid churn of 1.01%, consistent with the year-ago quarter. The Consumer Wireline segment had 273 thousand AT&T Fiber net adds.

AT&T's adjusted EBITDA of $10.56 billion was up from $10.23 billion a year ago. The company generated $6.4 billion in free cash flow. It spent $4.6 billion on Capex.

Prepaid churn was 2.97% versus 2.87% in the year-ago quarter. Postpaid phone-only ARPU was $56.23, up 1.4% versus the year-ago quarter, due to pricing actions and a mix shift to higher-priced unlimited plans.

Operating Income: Operating income was $5.27 billion, versus a loss of $(21.09) billion a year ago. 

Mobility segment operating income was up 6.2% Y/Y to $6.2 billion with a margin of 27.7% compared to 27.2% in the year-ago quarter. The Business Wireline segment operating margin was 3.3% compared to 9.6% in the year-ago quarter. The Consumer Wireline segment operating margin was 6.8% compared to 5.8% in the year-ago quarter.

FY24 Outlook: AT&T expects Wireless service revenue growth in the 3% range, Broadband revenue growth of 7%+, and adjusted EPS of $2.15 – $2.25 versus $2.46 consensus.

It projects full-year adjusted EBITDA growth in the 3% range. The company now expects a full-year free cash flow of $17 billion-$18 billion.

In 2025, the company expects to deliver adjusted EPS growth.

Price Action: T shares traded lower by 2.73% at $16.72 in the premarket on the last check Wednesday.

Photo by Mike Mozart via Flickr