AT&T Shares Plunged 9% in Morning Trading

Tiger Newspress2022-07-21

AT&T shares plunged 9% in morning trading as AT&T cut free cash flow forecast as it chased customer growth.

AT&T Inc on Thursday lowered its forecast for annual free cash flow by about $2 billion as it expands 5G and fiber internet availability and doubles down on promotional activities to gain subscribers.

AT&T raised prices on some of its older plans in June and later warned that it could increase them again as red-hot inflation drives up costs of labor, supplies and transportation.

PP Foresight analyst Paolo Pescatore, however, said inflation will drive users to consider signing up for cheaper services.

AT&T now expects full-year free cash flow of about $14 billion, down from around $16 billion forecast earlier.

The company added more than 800,000 monthly bill paying wireless subscribers and 316,000 new broadband customers in the second quarter ended June 30.

AT&T raised its forecast for annual revenue growth at its wireless service business after total revenue of $29.6 billion came in-line with market estimates of $29.55 billion, according to IBES data from Refinitiv.

"As a result of our higher-than-forecasted customer growth, we're increasing our mobility service revenue guidance to 4.5%-5% growth for the full year," Chief Executive Officer John Stankey said. The company had earlier forecast wireless service revenue growth of 3% or more.

Excluding items, the company earned 65 cents per share, beating estimates of 61 cents per share.

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