AT&T misses quarterly revenue estimates as competition weighs

(Reuters) -Shares of AT&T Inc (NYSE:) fell 4% in premarket trade on Thursday as the wireless carrier missed Wall Street estimates for first-quarter revenue, signaling intense competition from rivals Verizon Communications Inc (NYSE:) and T-Mobile US (NASDAQ:) Inc.

Much like other sectors, telecoms are facing the pinch of consumers reluctant to spend more for 5G adoption and broadband connections on the back of high prices and soaring interest rates.

Still, the Dallas, Texas-based carrier added 424,000 postpaid phone subscribers in the latest quarter, above Factset estimate of 422,800 additions.

Analysts and investors watch postpaid phone figures closely as their customers pay a recurring monthly bill, making them valuable to the carriers.

Total revenue for the first quarter rose 1.4% to $30.1 billion, compared with $29.7 billion a year earlier. Analysts on average were expecting $30.27 billion, according to Refinitiv IBES data.

Growth was driven by higher revenue in broadband services, partly offseting lower equipment sales, AT&T said.

“It was not all bad news, and some aspects of AT&T’s operations came in above estimates, but it is the free-cash-flow figure that seems to have caused all the damage, given that it points to likely lower dividend payouts going forward,” said Stuart Cole, head macro economist at Equiti Capital.

AT&T’s free cash flow came in at $1 billion for the reported quarter.

Income from continuing operations was $4.5 billion, or 57 cents per share, in the quarter, compared with $5.1 billion, or 65 cents per share, a year earlier.

Excluding items, the company earned 60 cents per share, above analysts’ estimate of 59 cents per share.

Shares of Verizon and T-Mobile fell nearly 1% premarket after AT&T announced its quarterly numbers.