AT&T Jumps Higher Thursday After Better-Than-Expected Q3 Results – ValueWalk
- AT&T gapped up at the open Thursday after the company dialed in better-than-expected third-quarter revenue and earnings.
- The company also boosted its full-year earnings guidance.
- Analysts see a potential upside of nearly 36% in the stock.
AT&T (NYSE:T) gapped up 4.86% Thursday after the company dialed in better-than-expected third-quarter revenue and earnings. Those numbers were driven by a higher wireless postpaid subscriber count than analysts anticipated.
Around 30 minutes into Thursday’s session, AT&T was trading 9.17% higher, at $16.95.
Arnott Capital commentary for the month of September ended September 30, 2022. The fund returned negative 1.79% for the month of September 2022. Net exposure averaged 29% long, while gross averaged 107%. This brings our Calendar Year Return to positive 3.06% and since inception return to positive 23.00% p.a. net of fees. Q3 2022 hedge Read More
Find A Qualified Financial Advisor
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
The results may alleviate investor concerns that AT&T and its mobile-service-providing industry peers may suffer as consumers curtail spending amid high inflation and recessionary fears. AT&T shares already got walloped in July, following its second-quarter report, when it said a greater number of late payments from consumers were making a dent in cash flow.
For the third quarter, adjusted earnings per share from continuing operations came in at $0.68, while revenue from continuing operations was $30 billion.
As you can see using data compiled by MarketBeat, that marked a year-over-year gain of 3% on the bottom line, and a top-line decrease of 4.1%.
Even with the revenue decline, AT&T exceeded Wall Street’s expectations of $0.61 cents per share on revenue of $29.8 billion.
Highlights from the report include:
- 708,000 postpaid phone net additions in the quarter. This topped analyst estimates of 582,000. Postpaid subscribers are generally those with unlimited monthly data plans.
- This year, AT&T has added more than 2.2 million postpaid subscribers so far. The company said that’s “expected to be industry best.”
- 338,000 AT&T fiber Internet net additions, for its second-best quarter ever.
- Wireless service revenue grew 5.6%, AT&T’s best growth in more than a decade.
- CEO John Stankey said AT&T expects to achieve wireless service revenue growth in the upper end of a range between 4.5% and 5%.
AT&T noted that broadband network deployment was continuing on or ahead of schedule, while its mid-band 5G spectrum now covers 100 million people. The company updated its end-of-year 5G coverage target to more than 130 million people.
It also said it was on track to achieve more than $4 billion of its $6 billion run-rate cost savings target by the end of 2022.
While all that news certainly cheered investors, the company’s upwardly-adjusted earnings estimate is likely even more important. AT&T says it expects adjusted earnings per share from continuing operations to come in at $2.50 or higher for the full year.
MarketBeat analyst data for AT&T show the consensus rating as “hold,” although as of Thursday’s pre-market, no analysts had yet updated their ratings to reflect new information.
AT&T has been in a long downward trend since early 2020, recently dropping to its lowest point since 2023. However, a more relevant short-term trend line indicates potential for the stock to regain a level between $21 and $22, where it was trading earlier this year.
In fact, analysts’ price target of $22.72 reflects a potential upside of 38.55% in the next 12 to 18 months.
By market capitalization, AT&T is the second-largest company in the telecom services industry, behind Verizon (NYSE: VZ). Both, along with wireless giant T-Mobile U.S. (NASDAQ: TMUS) are components of the S&P 500 Communications Services sector, tracked by the Communication Services Select Sector ETF (NYSEARCA: XLC).
The ETF was trading higher early Thursday, spurred by AT&T’s strength.
Verizon reports its third quarter Friday ahead of the opening bell. Analysts expect earnings of $1.28 per share on revenue of $33.90 billion. That would mark a decline on the bottom line, but a gain on the top line.
MarketBeat earnings data show that Verizon has a mixed record when it comes to missing or beating views.
T-Mobile reports its third quarter on October 27, with Wall Street eyeing earnings of $0.60 per share on revenue of $20.08 billion. Both would be year-over-year increases.
T-Mobile has topped earnings views in the past eight quarters, but missed revenue expectations on occasion, according to data compiled by MarketBeat.
Before you consider AT&T, you’ll want to hear this.
MarketBeat keeps track of Wall Street’s top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on… and AT&T wasn’t on the list.
While AT&T currently has a “Hold” rating among analysts, top-rated analysts believe these five stocks are better buys.
Article by Kate Stalter, MarketBeat