Although AT&T reported good growth in its Consumer Wireline and Mobility segments today, Wall Street was unhappy with a disappointing free cash flow forecast. The company’s stock has fallen about 7% at the time of this writing. AT&T expects its full-year free cash to be $14 billion, down from a prior outlook of $16 billion. It cited longer collection times from customers and pressure in its Business Services unit.
AT&T added 316,000 net AT&T Fiber subscribers during its second quarter 2022, resulting in fiber penetration of nearly 37% with about 6.6 million total fiber subs. However, this was offset by a 341,000 decrease in non-fiber net adds.
Consumer Wireline revenues were $3.2 billion, up 1.1% year over year. The company bragged it now has the ability to serve 18 million customer locations in more than 100 U.S. metro areas with AT&T Fiber. It reported Fiber ARPU of $61.65.
But AT&T saw a decline in Business Wireline. Revenues were $5.6 billion, down 7.6% year over year due to lower demand for legacy voice and data services, a strategic decision to de-emphasize non-core services. And it also saw lower revenues from the government sector.
John Stankey, AT&T CEO, said in a statement, “We’re expanding our customer base at an accelerated pace across our twin engines of growth – 5G and fiber. We’re rapidly building out our best-in-class networks on the heels of record-level connectivity investment. We’ve already added nearly 2 million AT&T Fiber locations this year.”
The analysts at New Street Research noted today, “AT&T has undergone profound transformation in the last 17 months, shedding Warner Media, spinning out control of DirecTV’s operations to TPG, and divesting a host of ancillary operations. The set of businesses that are left makes AT&T look a lot like Verizon, just with a little more fiber and a little less wireless.”