AT&T Inc (NYSE: T) is up 10% this morning after the telecommunications behemoth reported a strong Q3 and raised its guidance for the future.
The multinational added 708,000 postpaid phone subscribers this quarter – 155,700 more than the Street estimates. On CNBC’s “Squawk Box”, CEO John Stankey said:
Subscriber number is really impressive but more importantly, we saw the profitability shift we said was coming in the second half of this year. Our cash flow is in a much better place, we’re at record EBITDA in our wireless business.
Fibre subscribers also increased by 338,000 this quarter, also head of consensus. AT&T resorted to price increase in Q3 that slightly raised churn to 0.84%. Still, the Chief Executive noted:
We knew it’ll be accretive, and it has been. In many instances, customers elected to move into plans with slightly higher monthly price but gave them more value and updated the services and features their older embedded plan didn’t offer.
More importantly, AT&T reiterated its commitment to $14 billion in free cash flow this year. That was particularly exciting for investors as it suggests the Dallas-headquartered firm will be able to repay debt and maintain dividend in the face of higher interest rates.
AT&T also raised its outlook for full-year adjusted EPS by 4 cents to $2.50. On the downside, though, it did not reaffirm its previous guidance for $20 billion in free cash flow next year.
Wall Street currently has a consensus “hold” rating on AT&T shares.
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