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Customer Growth at AT&T Outpaces Inflation

Industry: Telecom Infrastructure
Current: Company Performance

AT&T Inc.'s profit and user growth were stronger than expected, and the increase in share prices of the company was the largest since the beginning of the pandemic
The biggest intraday gain since March 2020 occurred when AT&T’s shares surged as much as 10% in New York on October 20, 2022
The company asserted that "record levels" of investment in 5G and fiber-network buildouts in the first three quarters of 2022 contributed to the completion of its wireless enhancements earlier than expected

AT&T Inc. Strong Profit and Growth

The share prices of AT&T Inc. recorded their largest increase since the early days of the COVID-19 pandemic after the company reported better-than-expected profit and user growth. Improvement in results by the telecommunications giant—the first wireless carrier to report earnings for Q3 2022—indicates that the sector continues to be immune to decades-high inflation and constrained consumer spending. On October 20, 2022, AT&T’s stock prices increased as much as 10% in New York, the largest intraday increase since March 2020.

Investors began to worry early in 2022 when the company cut its free cash flow forecast from $16 billion, in part because of late payments by customers, raising questions about its ability to pay $8 billion dividend and keep to debt-reduction plans. Bill-paying habits among consumers reverted to the pre-pandemic levels.

The company claimed that "record levels" of investment in 5G and fiber-network buildouts in the first three quarters of 2022 are partly responsible for its wireless improvements being completed ahead of schedule. AT&T expects a more than $2 billion decrease in spending in the fourth quarter. The company reported a significant increase in the total revenue and net profit in 2022 over that in the last few years. AT&T sold its media division to concentrate on the rollout of 5G wireless and fiber broadband. The company is considering a joint venture to help extend fiber to other markets.

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