Wireless carrier AT&T raised its annual free cash flow forecast on Thursday as its quarterly subscriber additions trounced estimates on the back of promotions and phone upgrades, sending its shares up 2% before the bell.
The company said it expects full-year free cash flow of about $16.5 billion, up from its prior forecast of $16 billion or higher. Its third-quarter figure of $5.2 billion also handily beat estimates, according to Visible Alpha.
AT&T has in recent months tried to stand out in the competitive U.S. market with offers, including a hefty discount on the iPhone 15 series that some analysts consider to be one of the most aggressive in the industry.
The company has also benefited from an ongoing shift by customers into higher priced plans that offer more data.
It added 468,000 net monthly bill-paying wireless phone subscribers in the third quarter ended September, surpassing expectations for 398,200 additions, according to Factset.
Revenue came in at $30.4 billion, beating estimates of $30.19 billion, according to LSEG data.
The company also raised its expectations for full-year adjusted core earnings growth to more than 4%, from prior expectations of 3% or more.
AT&T has been clamping down on expenses and expanded its cost-cut plan by $2 billion in July after it achieved a $6 billion goal ahead of schedule through measures including a reduction in office locations.
A lower cost bill is crucial as AT&T needs a steady flow of cash to service its net debt of $128.7 billion and support a dividend that is among the highest for U.S stocks.
(Reporting by Samrhitha Arunasalam in Bengaluru; Editing by Arun Koyyur)
