AT&T posted its best subscriber growth in a decade. Profit beats expectations

AT&T, the third-largest wireless carrier in the United States , reported fourth-quarter earnings and revenue above analysts' expectations. According to the company, this was driven by the best broadband subscriber growth in a decade, as well as strong demand for fiber and mobile services as part of its bundled offerings strategy.

AT&T reported that quarterly revenue rose 3.7% year-on-year to $33.5 billion. The result exceeded analysts' forecasts - they expected $32.8 billion, Bloomberg writes.

Adjusted earnings rose to $0.52 per share, which was also above analysts' expectations ($0.46).

Mobile services revenue rose 2.4% year-over-year to $17 billion, matching the consensus forecast cited by MarketWatch. AT&T's fiber internet revenue was $2.2 billion, up 13.6%.

Free cash flow, a key metric for AT&T investors, came in at $4.2 billion, topping the FactSet consensus of $3.9 billion.

AT&T also said it plans to return $45 billion to shareholders in the coming years through dividends and share buybacks.

The company's shares were up 4.8% in trading on January 28. They have lost about 7% since the beginning of the year, lagging behind the broad U.S. market.

Amid fierce competition among the big three mobile carriers (also including Verizon Communications and T-Mobile) for customers in a saturated market, AT&T has shifted its focus to a one-stop-shop strategy for all connectivity needs, Bloomberg writes.

The key element of this strategy remains customers who use several products of the company at once - for example, mobile communication and home Internet, the agency notes.

AT&T said its home fiber internet service (AT&T Fiber) has attracted 283,000 new customers, beating analysts' expectations, Bloomberg reported. The company noted that 42% of households using AT&T Fiber also choose its mobile services. In parallel, the operator is developing another fast-growing home Internet offer - Internet Air, based on the 5G network: the service attracted 221 thousand customers during the quarter, although Wall Street expected 272 thousand, the agency notes.

In the fight for mobile subscribers with its competitors AT&T actively uses promotions and discounts to attract and retain customers, including offers with the exchange of devices for the latest smartphone models. Nevertheless, the operator reported 421 thousand new mobile subscribers for the period, falling short of market expectations (440 thousand), indicating pressure from stiff competition, Bloomberg notes.

AT&T projected full-year earnings above market expectations, expecting that its wireless and fiber network expansion will allow the company to capitalize on the growing demand for 5G and high-speed internet in the United States. The optimistic outlook is backed by massive infrastructure investments, including the purchase of Lumen's consumer fiber business for nearly $6 billion and the $23 billion acquisition of EchoStar's spectrum licenses, Reuters noted.

The deals are expected to strengthen AT&T's competitive position through faster data speeds and improved mobile coverage, the agency said. The company is betting on steady growth in broadband demand amid the proliferation of remote working, streaming and connected devices, which continues to boost data consumption.

This article was AI-translated and verified by a human editor