AT&T Inc (NYSE:T, XETRA:SOBA) added more wireless subscribers than expected in the first quarter, as its strategy of bundling mobile and high-speed internet services continued to attract customers, sending revenue slightly above Wall Street estimates.
The telecommunications giant reported postpaid phone net additions of 294,000 for the quarter, ahead of analyst expectations of about 262,200 additions.
Quarterly revenue rose 2.9% to $31.5 billion, topping estimates of $31.25 billion, while adjusted earnings per share came in at $0.57, also beating expectations. Adjusted EBITDA totaled $11.88 billion, above forecasts.
Growth was driven by the company’s advanced connectivity segment, where operating revenue increased 4.7% year-over-year to $28.5 billion. AT&T said 42% of households adopting its advanced home internet services during the quarter also chose its wireless offerings, highlighting the effectiveness of its bundling strategy.
However, free cash flow fell 19% to $2.5 billion, reflecting higher capital expenditures as the company continued investing in network infrastructure. Capital spending rose 14% to $4.9 billion in the quarter, raising concerns among investors about near-term cash generation.
Net income for the quarter was $3.8 billion, while operating income rose 15.7% to $6.7 billion.
AT&T reaffirmed its full-year guidance, expecting adjusted earnings per share between $2.25 and $2.35 and free cash flow of at least $18 billion.
The company also maintained its capital return plans, repurchasing $2.3 billion in stock during the quarter, with $13.5 billion remaining under its current authorization.
Shares of AT&T were down about 3.3% in early trading.