AT&T raises annual profit forecast on strong wireless additions

US WIRELESS carrier AT&T raised its annual profit view and posted a better-than-expected adjusted profit in its third-quarter on Thursday (Oct 20) on strong demand for its phone and Internet services, and as more Americans upgraded to 5G plans.

After unwinding its efforts to become a media and entertainment company, AT&T is back to focusing on wireless services in a highly competitive telecoms market where customers are cutting back on spending due to decades-high inflation.

AT&T’s promotional offers on smartphones and wireless plans helped it add 708,000 net new monthly bill paying wireless phone subscribers, surpassing Factset estimates of 552,300 additions and sending its shares up 2.8 per cent before the bell.

The carrier also added 338,000 fibre Internet customers in the quarter and said it was on track to achieve its annual free cash flow target of US$14 billon.

AT&T has not raised prices since a July warning that some customers were taking more time to clear their bills, which had forced it cut its forecast for annual free cash flow.

The company now expects adjusted profit per share for the full year to be US$2.50 or higher compared with earlier expectations of US$2.42 to US$2.46 per share.

Total revenue rose 3 per cent to US$30 billion, exceeding expectations of US$29.86 billion, according to Refinitiv data.

Income from continuing operations was US$6.3 billion compared with US$5 billion a year earlier. Adjusted earnings per share came in at 68 cents per share, topping estimates of 61 cents.