By Dhirendra Tripathi
Investing.com – AT&T (NYSE:T) shares rose 4% Thursday as higher number of users and revenue gains in the March quarter helped outweigh concerns over the telecom and media giant’s debt.
The company said on Thursday it added 595,000 net wireless phone subscribers in the first quarter, more than double what analysts had expected. That helped nudge revenue higher by 2.7% at $43.9 billion versus $42.8 billion in the year-ago quarter.
Revenue gains also came from growth in fiber-optic internet subscribers and its paid streaming service HBO Max.
Operating income was $7.7 billion versus $7.5 billion in the year-ago quarter, the company attributing the rise to higher revenue and lower amortization costs.
Wireless service revenue rose 0.6% at $14 billion as subscriber gains offset declines in international roaming revenues. The company said it continues to be comfortable with guidance of full-year wireless service revenue growth in the 2% range.
The company’s debt, which is a concern for most telecom operators given as they incur costs on buying spectrum at auction and then setting up networks, rose.
AT&T had to take on more in the last quarter to pay for spectrum. The debt rose by $21 billion to end the quarter at $169 billion. The net debt to Ebitda ratio deteriorated to 3.1x from 2.7x though the company managed to bring it down by 50 basis points.
One basis point is one-hundredth of a percentage point.
The company expects to end the financial year around $154 billion in debt and a net debt to Ebitda ratio of 3x.