AT&T revenue jumps 0.9% despite adding 326,000 subscribers

Dallas-based telecommunications giant AT&T announced a positive second-quarter performance, with revenue rising by 0.9 percent to $29.9 billion. The growth was primarily driven by a 2 percent increase in revenue from the Mobility business.
Q2 2023 AT&T resultAT&T’s CEO, John Stankey, expressed confidence in the company’s strategic direction set three years ago, which has contributed to the favorable trajectory.

During the second quarter, AT&T added 326,000 postpaid phone subscribers, in line with the prediction provided earlier by finance chief Pascal Desroches. However, this figure represented a nearly 60 percent decline compared to the same period last year.

The Mobility business contributed significantly to the revenue boost, with revenues rising by 2 percent to $20.3 billion. This increase was primarily due to higher service revenues, partially offset by lower equipment revenues. Service revenues saw a notable 4.9 percent rise to $15.7 billion, driven by subscriber growth and increased average revenue per user (ARPU). Meanwhile, equipment revenues experienced a decline of 7.2 percent to $4.6 billion, mainly caused by lower sales volumes.

On the other hand, AT&T’s Business Wireline revenues faced a 5.6 percent drop to $5.3 billion, attributed to reduced demand for legacy voice and data services and product simplification. However, Consumer Wireline revenues fared better, rising by 2.4 percent to $3.3 billion, driven by gains in broadband services, which outweighed declines in legacy voice, data, and other offerings.

AT&T also witnessed impressive growth in Mexico, with revenues in that market increasing by 19.7 percent to $967 million. This growth was a result of increased revenue from both services and equipment.

Operating income for the quarter rose significantly by 29.3 percent to $6.4 billion, showcasing the company’s financial strength and effective cost management strategies. Notably, AT&T achieved its $6 billion cost-cutting goal ahead of schedule and now aims to target another $2 billion-plus in cost reductions over the next three years.

Capital expenditures for the quarter were $4.3 billion, down from $4.9 billion in the same period last year. AT&T remains committed to expanding its network infrastructure, with a focus on mid-band 5G spectrum coverage.

The company’s mid-band 5G now serves more than 175 million people, and they are on track to reach 200 million people with this technology by the end of the year. Additionally, AT&T’s fiber network has the capability to serve over 20.2 million consumer and 3 million business customer locations, with plans to expand this to over 30 million fiber locations by the end of 2025.

In an effort to enhance its fiber network capabilities, AT&T finalized a joint venture with BlackRock to form Gigapower, a company that aims to provide fiber networks to eight new areas.

Overall, AT&T’s second-quarter performance shows promising growth in key areas, backed by prudent financial management and strategic investments in advanced technologies to meet the increasing demands of customers.