AT&T brought in more mobile subscribers than Wall Street expected in the third quarter, sending shares higher.
The telecommunications company reported on Wednesday morning that it added 403,000 new monthly wireless phone subscribers in the last quarter, more than analysts expected. That overshadowed the revenue of $30.2 billion, just shy of analysts’ $30.4 billion estimate. Earnings per share of 0.60 cents beat estimates, and net income was $100 million.
“They had a good third quarter, revenue came in a little bit below consensus but EPS came in a little bit above so it kind of shapes out,” said Joseph Bonner an analyst at Argus Research. AT&T shares rose 1.3%.
AT&T performed better than expected this quarter even after heavy hurricanes and a month long work strike. A continued steady increase of broadband and wireless adds combined with higher average revenues per unit and a low churn rate have managed to keep investors satisfied.
AT&T’s fiber network showed a steady demand with 226,000 fiber nets adds reported in Q3, making this the 19th consecutive quarter of more than 200k fiber net adds. This comes after a 30 day labor strike involving 15,000 workers in the southeast region back in September.The work stoppage and the impact of hurricanes Helene and Milton are estimated to have a financial impact of $115 million.
The better than expected returns on the fiber investment have estimated that AT&T may go beyond the initial target by 10-15 million more locations. Postpaid phone net adds came in at 403,000 down from 468,000 year-over-year.
“They’re not blowing the doors off, but neither are they failing, it was a good number,” says Bonner in regards to postpaid phone net adds.
However, AT&T did have a $4.4 billion noncash goodwill impairment charge in the Business Wireline unit, driven by an industrywide secular decline of legacy services.
AT&T’s increase in prices has allowed postpaid phone monthly average revenue per unit to rise to $57.07 up 1.9% year-over-year.
Customers that stay on have made a positive shift in the postpaid phone churn rate which improved to 0.78%.
Analysts have brought up concerns about upgrade rates potentially spiking with Apple's latest AI release, but as of Wednesday’s report the upgrade rate is down at 3.5% from last year's 3.9%.
When asked AT&T’s CEO John Stankey said “ So I don't know that I would expect when the software release comes out, that all of a sudden, we see this massive uptick but the consumer will ultimately decide.” The latest Apple software released on October 28th. Stankey states that AT&T is prepared to adjust to whatever takes place due to their flexibility after the first three quarters of the year.