AT&T (NYSE:T) Shares are rising during Wednesday’s trading session following the telecom giant’s third-quarter report. The stock price was up about 4% as of 1:45 p.m. ET.
AT&T reported its third-quarter results before the market opened Wednesday morning, with non-GAAP (adjusted) earnings of $0.60 per share, better than the average Wall Street analyst estimate of $0.57 per share. But revenue of $30.2 billion fell short of expectations for revenue of $30.45 billion. However, margins were strong and the company provided encouraging guidance on a number of key areas.
In the quarter, the company added 403,000 postpaid phone subscriptions and mobility services revenue increased 4% compared to the same period last year. Meanwhile, it added 226,000 new AT&T Fiber subscriptions, making the third quarter the 19th straight quarter of net additions above 200,000. Total consumer broadband sales increased 6.4% year-over-year.
Despite the strong performance of the wireless and broadband segments, continued declines in the mobile business segment continued to weigh on revenue. Total revenue in the period fell 0.5% from $30.4 billion in the same period last year, and adjusted earnings per share fell about 6%.
Even with year-over-year declines in revenue and profit in the third quarter, AT&T’s key growth drivers delivered encouraging results – and profitability came in better than expected. The implementation of the strategy appears to be on schedule.
Management also reiterated its full-year expectations. The company continues to expect annual wireless and broadband revenues to grow by approximately 3% and more than 7%, respectively. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) are expected to rise 3%. Management also said the company is on track to achieve its target of a net debt-to-adjusted EBITDA ratio of 2.5 in the first half of next year.
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