AT&T's Q4 Profit Likely Fell as Subscriber Growth Slowed

Declining capital spending, expanding cash flow hold promise for 2024
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Key Takeaways

  • AT&T Inc.'s fourth-quarter profit likely fell as rising service and sales costs offset an expected marginal revenue gain.
  • Steady subscriber growth persisted for AT&T, but probably at the slowest rate since early 2022.
  • The company's stock lost ground last year, belying sound operational performance, Bank of America said.

AT&T Inc. (T), the largest U.S. wireless carrier, likely will report an 11% decline in fourth-quarter profit on Wednesday, reflecting a marginal revenue increase that was more than offset by rising service and sales costs.

Analysts project that AT&T will report earnings of $3.9 billion, or 56 cents a share, excluding one-time adjustments. That's down from $4.4 billion, or 61 cents per share, in the same period a year ago, excluding a large one-time charge that produced a reported loss of $23.5 billion.

AT&T Quarterly Earnings
   Analysts' Estimates for Q4 2023 (ex-one time items)  Q3 2023 Q4 2022 
 Revenue  $31.4B  $30.4B  $31.3B
 Diluted EPS  $0.56  $0.64  $0.61
 Net Income  $3.9B  $4.6B  $4.4B
Source: Visible Alpha

Key Metric

Solid subscriber growth likely persisted for AT&T in the fourth quarter, but probably at its slowest rate since the company lost 5.2 million subscribers in the first quarter of 2022. The company likely added 5.4 million subscribers in the fourth quarter, according to analysts' estimates compiled by Visible Alpha, down from 6.6 million in the third quarter and 6.7 million in last year's fourth quarter.

Business Spotlight

In a Jan. 17 report, Bank of America suggested AT&T's stock valuation hasn't matched its solid operational performance. Concerns about the sustainability of wireless subscriber growth—particularly with Amazon.com Inc.'s (AMZN) speculated entry into the category—and cable competition provide the likely reasons, the report said. Nonetheless, Bank of America expects reduced capital spending and expanding cash flow will bolster AT&T's operating performance again in 2024.

Shares of AT&T gained 2.3% to finish Tuesday at $17.19. The stock has lost 10% over the past year.

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  1. Visible Alpha. "AT&T Inc.: (T)."
  2. AT&T. ""
  3. Visible Alpha. "AT&T Inc.: (T) Subscriber Estimates."
  4. Bank of America. "4Q Preview & Delta Analysis - Wireless Ascendant."
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