Benzinga - AT&T Inc (NYSE: T) reported earnings before the market opened Thursday, April 20.
Despite beating EPS estimates, the stock tumbled more than 10% on concerns over growth and lower-than-expected free cash flow.
The Dallas-based company is known as a value stock that pays a strong dividend, so concerns over its cash flow is bad news for the company.
AT&T reported that its first-quarter (Q1) cash flow came in at $1 billion, down more than 60% from the previous year. The estimates were for AT&T’s cash flow to come in around $3 billion — a significant miss.
On top of the cash-flow concerns, AT&T’s mobile subscriber growth slowed down on a year-over-year basis. During Q1 last year, AT&T added 691,000 subscribers. This year during Q1 that number dropped to 424,000.
Price Action: AT&T’s stock moved down more than 10% on Thursday. The stock traded around $17.64 late Thursday afternoon as investors weigh what the poor earnings report will mean for future free cash flow.
AT&T’s stock is well below its pre-pandemic levels, failing to recover with the overall market.
Verizon Communications Inc (NYSE: VZ) traded down 4% Thursday in sympathy with AT&T as fears over subscriber growth permeate the industry.
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Image: Courtesy of AT&T, Pixabay
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