Shares of telecommunication giant AT&T (NYSE:T) gained in pre-market trading after the company reported earnings for its third quarter of Fiscal Year 2023. The company’s Q3 adjusted earnings fell by 5.9% year-over-year to $0.64 per share, which was above analysts’ consensus estimate of $0.62 per share.
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The company’s revenues grew by 1% year-over-year to $30.4 billion and above Street estimates of $30.2 billion. In addition, free cash flow went up by $1.3 billion to $5.2 billion at the end of the third quarter.
AT&T had 550,000 total postpaid net additions in the third quarter with postpaid phone net additions of 468,000. The postpaid average revenue per user (ARPU) inched up by 0.6% to $55.99, “due to pricing actions, higher international roaming and a mix shift to higher-priced unlimited plans.”
John Stankey, AT&T’s CEO commented, “Our investments in best-in-class 5G and fiber connectivity are fueling our growth engine. We’re gaining profitable customer relationships and becoming more efficient.”
As a result, management has now raised its FY23 free cash flow outlook to around $16.5 billion versus its prior outlook of $16 billion.
Is AT&T Stock a Buy or a Hold?
Overall, analysts are cautiously optimistic about AT&T stock with a Moderate Buy consensus rating based on five Buys and six Holds. The average AT&T price target is $19.22 implying an upside potential of 34.2% from current levels.
