AT&T (NYSE: T) stock is climbing in Wednesday’s trading session following the telecom giant’s third-quarter report. The share price was up by about 4% as of 1:45 p.m. ET.
AT&T reported its Q3 results before the market opened Wednesday morning, posting non-GAAP (adjusted) earnings of $0.60 per share, which beat the average estimate of Wall Street analysts for $0.57 per share. But its sales of $30.2 billion fell short of expectations for sales of $30.45 billion. However, margins were strong, and the company gave encouraging guidance along some key lines.
In the quarter, the company added 403,000 postpaid phone subscriptions, and mobility services sales climbed 4% compared to the prior-year period. Meanwhile, it added 226,000 new AT&T Fiber subscriptions, making Q3 the 19th straight quarter with net additions above 200,000. Total consumer broadband sales were up 6.4% year over year.
Despite strong performances from its wireless and broadband segments, continued declines in the business wireline segment continued to weigh on the top line. Total sales in the period were down 0.5% from the $30.4 billion posted in the prior-year period, and adjusted earnings per share declined roughly 6%.
Even with annual declines in sales and earnings in Q3, AT&T’s core growth drivers served up encouraging results — and profitability came in better than anticipated. Strategy execution appears to be on track.
Management also reiterated its full-year guidance. The company continues to expect annual wireless services and broadband revenue to grow by roughly 3% and more than 7%, respectively. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) are projected to increase by 3%. Management also said that the company is on track to reach its goal of hitting a net-debt-to-adjusted-EBITDA ratio of 2.5 in the first half of next year.
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