AT&T ($T) reported a year-over-year decline in its second-quarter earnings while surpassing expectations in postpaid phone subscriber additions and reaffirming its annual earnings projections. For the June quarter, the adjusted earnings stood at $0.57 per share, matching the consensus as determined by Capital IQ analysts, but showing a decrease from $0.63 per share from the same period last year.
The company's revenue experienced a slight downturn, decreasing by 0.4% to $29.8 billion, which was below the anticipated figure of $29.98 billion as projected by market experts. "Our solid performance this quarter demonstrates the durable benefits of our investment-led strategy," stated Chief Executive Officer John Stankey.
Following this announcement, AT&T’s shares rose by 3.6% during recent premarket trading. The communications segment faced a revenue decrease of 0.9% year over year, totaling $28.58 billion. Within the mobility sector, service revenue saw a growth of 3.4%, reaching $16.28 billion, while equipment revenue faced an 8% drop to $4.2 billion largely due to a decrease in sales volumes.
Conversely, consumer wireline revenue rose by 3% to $3.35 billion, aided by growth in broadband subscriptions. On the other hand, business wireline revenue plummeted by 9.9% to $4.76 billion due to dwindling demand for traditional voice and data services. During this quarter, AT&T successfully added 419,000 net postpaid phone subscribers, which is a significant increase compared to the 326,000 reported last year and the 349,000 recorded in the previous quarter.
The consensus from Visible Alpha anticipated a more modest net increase of 266,100. On the cost side, total operating expenses increased to $24.04 billion from $23.51 billion in the same quarter last year. This increase is attributed to higher depreciation costs linked to ongoing investments in fiber and 5G technology, accelerated depreciation on wireless network equipment, and restructuring expenses. Looking forward, AT&T has maintained its projected adjusted earnings per share (EPS) for 2024 to be between $2.15 and $2.25, while analysts in Wall Street expect a figure of $2.21.
Furthermore, the company reiterated its revenue growth forecast, expecting a growth rate in the wireless service segment to be around 3%, and more than 7% for broadband services. Price as of the last trading session stood at $18.69, reflecting a change of +0.48, equivalent to a percentage increase of +2.64..