Investing.com -- AT&T has reported better-than-anticipated third-quarter adjusted profit and backed its full-year forecast, as the telecommunications group was boosted by strong wireless subscriber additions.
The company added 403,000 monthly bill-paying wireless phone subscribers during the period, above Bloomberg consensus estimates of 394,645, in a sign that its higher-priced unlimited plans -- which are typically cheaper than those offered by rivals -- are attracting cost-conscious consumers. Postpaid phone churn, a measure of the amount of people disconnecting from the service, came in at 0.78% versus 0.79% in the year-ago period.
"We delivered another strong and consistent quarter, furthering our leadership in converged 5G and fiber connectivity," said AT&T (NYSE:T) Chief Executive John Stankey in a statement.
Shares in AT&T moved higher in premarket US trading on Wednesday.
Net subscribers to its fiber business, meanwhile, increased by 226,000 -- its 19th-straight quarter of net additions of over 200,000, but below projections of 265,390. Stankey said fiber installations were temporarily impacted by the powerful Hurricane Helene in September and a work stoppage in the Southeast.
In August, more than 17,000 workers in the region, including technicians and customer service representatives responsible for overseeing AT&T's residential and business wireline telecommunications network, began a strike in protest of perceived unfair labor conditions. AT&T and the union representing the workers reached a new pay agreement earlier this month.
Free cash flow, a key figure used in determining dividend levels, fell by 1.9% year-on-year to $5.1 billion, although it was higher than estimates of $4.69 billion.
Adjusted earnings before interest, taxes, depreciation, and amortization edged up to $11.6 billion, compared to $11.2 billion in the corresponding period in 2023. Analysts had seen the number at $11.38 billion.
Revenue, however, fell by 0.7% to $30.2 billion, missing expectations, due in part to weaker demand for AT&T's business wireline voice and data services. Intellectual property sales of around $100 million in the prior year also dented returns at the business.
AT&T reiterated its full-year guidance for adjusted core earnings and wireless service revenue growth, but flagged that income at the business wireline division would decline in the "high-teens" range. It had earlier guided for a drop in the "mid-teens."