While AT&T today reported good growth in its consumer wireline and mobile businesses, Wall Street is unhappy with disappointing free cash flow forecasts. The company's shares have fallen about 7 percent. Its full-year free cash is expected to be $14 billion, down from a previous estimate of $16 billion. It cited longer customer collection times and pressure on its business services unit.
AT&T added 316,000 net AT&T fiber subscribers in the second quarter of 2022, for a fiber penetration rate of nearly 37% and a total of about 6.6 million fiber subscribers. However, this was offset by a decrease in non-fiber net additions of 341,000.
Consumer wireline revenue was $3.2 billion, up 1.1 percent year-over-year. The company boasted that it now has the ability to serve 18 million customers in more than 100 U.S. metro areas through AT&T Fiber. It reported a fiber ARPU of $61.65.
But AT&T's Business Wireline business declined. Revenue was $5.6 billion, down 7.6 percent year-over-year, due to lower demand for traditional voice and data services, a strategic decision to downplay non-core services. Revenues in the government segment also declined.
We are accelerating the expansion of our customer base with our twin engines - 5G and fiber," AT&T CEO John Stankey said in a statement. Following record connectivity investments, we are rapidly building our best-in-class network. We've added nearly 2 million AT&T Fiber locations this year."
Analysts at New Street Research noted, "AT&T has undergone a profound transformation in the last 17 months, divesting WarnerMedia, handing over operational control of DirecTV to TPG, and divesting many ancillary businesses. The remaining businesses make AT&T look a lot like Verizon, only with a little more fiber and a little less wireless."
