AT&T Beats On Q3 Earnings, Contains Revenue Loss Aided By 5G and Fiber Connectivity Momentum

• AT&T Inc (NYSE: T) reported third-quarter FY22 operating revenues of $30.00 billion, down 4.1% year-over-year, beating the consensus of $29.86 billion.
• The decline reflected WarnerMedia and other divestments.
• Excluding the impact of the divestitures, operating revenues for standalone AT&T were up 3.1%, reflecting higher Mobility revenues.
• In the Mobility segment, AT&T clocked 964 thousand postpaid net adds, 708 thousand postpaid phone net adds, and 108 thousand prepaid phone net adds.
• In Mobility, it saw a Postpaid churn of 1.01%, which increased from 0.92% last year. The Consumer Wireline segment had 338 thousand of AT&T Fiber net adds.
• AT&T's adjusted EBITDA of $10.71 billion was down from $10.80 billion a year ago. The company generated $3.8 billion in free cash flow. It spent $5.9 billion on Capex.
• Prepaid churn was less than 3%, with Cricket substantially lower. Postpaid phone-only ARPU was $55.67, up 2.4% versus the year-ago quarter, due to pricing actions, higher international roaming and a mix shift to higher-priced unlimited plans.
• Operating Income: Operating income declined to $6.0 billion from $6.2 billion a year ago.
• Mobility segment operating income was up 7.2% Y/Y to $6.42 billion with a margin of 31.7%. Business Wireline segment operating margin was 15.6%.
• Adjusted EPS of $0.68 beat the consensus of $0.61.
• Outlook: AT&T expects to achieve wireless service revenue growth in the upper end of the 4.5% - 5%. It updated Mid-band 5G spectrum end-of-year target to more than 130 million people.
• "We're investing at record levels to enhance our 5G and fiber connectivity and to deliver the best experience available in the market," said John Stankey, AT&T CEO.
• Price Action: T shares traded higher by 2.96% at $16 in the premarket on the last check Thursday.

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