Aside from the dividend, AT&T ( NYSE:T ) has been a letdown, with shares underperforming the S&P 500. This has been a lost decade for AT&T stockholders , as shares have decreased by 34.5%, while investing in an S&P 500 index fund, such as the SPDR S&P 500 Trust ( NYSEARCA:SPY ), would have provided a 164.80% return. Whatever AT&T achieved, regardless of the vast amounts of free cash flow (FCF) generated, the company was viewed as a mismanaged giant saddled with a massive debt. The rally was brief each time AT&T stock began to gather traction, and shares slid back into the red. Compared to the S&P 500, shares increased by 12.95% following an earnings beat and an increase in the 2022 outlook. Analysts began to commend AT&T stock after the third-quarter results were revealed, and after going through the earnings report and conference call, a decade of missed opportunities may finally be over.
In Q3, AT&T Delivered a Beat and a Raise
AT&T delivered in the third quarter, and the market reacted strongly to the release of the results and management commentary. AT&T had a quarterly beat on the top line, creating $30 billion in revenue, $140 million more than the consensus expectation, and a big surprise on the bottom line, generating $0.68 in EPS, a $0.07 increase. T’s improved outlook could significantly drive the stock’s price increase. Previously, AT&T expected standalone AT&T (AT&T after the WarnerMedia spinoff and other divestitures) to earn EPS in the $2.42 – $2.46 range. Based on consensus projections, the street was expecting $2.55 in earnings per share. AT&T boosted its 2022 EPS projection in the third quarter results release, expecting EPS from continuing operations to be $2.50 or higher for the fiscal year 2022.
Subscriber Growth in Q3
After reviewing the quarter, I believe AT&T is well-position...
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