AT&T surpasses Q1 forecasts for subscriber additions, free cash flow

DALLAS, Texas: This week, telecoms giant AT&T said that as more people purchased its higher-tier unlimited plans, it surpassed Wall Street expectations for first-quarter wireless subscriber additions and free cash flow.

The company’s 5G rollouts and plans, which have driven its growth in the competitive U.S. market, are usually cheaper than rivals, including Verizon, and appeal to more budget-conscious consumers.

A FactSet poll showed that AT&T added 349,000 net monthly bill-paying wireless phone subscribers in the first quarter, surpassing expectations of 286,800 additions.

The company also posted a 7.7 percent increase in broadband revenue for the period, resulting from efforts to expand its fiber network.

On a post-earnings call, AT&T’s finance chief Pascal Desroches said, "As our customer base continues to migrate to fiber from legacy services, our broadband support costs are decreasing, thanks to fiber’s more efficient operating model, greater reliability, and higher quality service."

Visible Alpha said the company’s free cash flow more than tripled to US$ 3.1 billion, beating estimates of $2.53 billion.

Jamie Lumley, analyst at Third Bridge, said, "The business fundamentals are in a better position than they were a year ago with substantial expansion in free cash flow combined with ongoing growth in postpaid wireless and fiber internet."

For the three months ending in March, the telecoms company reported its lowest first-quarter churn or the rate at which customers disconnect service, of 0.72 percent.

However, as the U.S. telecom sector continues to see fewer phone upgrades, its revenue totaled $30 billion, compared with LSEG expectations of $30.54 billion.