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The State Of The US Consumer: AT&T Crashes As Americans Can’t Afford To Pay Their Phone Bills
Francesco Abbruzzino, The Uncensored Report, LLC
Shares of AT&T fell on Thursday after CEO John Stankey said that customers are starting to put off paying their phone bills – which resulted in the wireless carrier cutting this year’s forecast for free cash flow by $2 billion, Bloomberg reports.
Shares fell as much as 11% in early trading, the company’s largest slide since 2022 which erased the stock’s YTD gains.
A weakened consumer adds to pressure facing AT&T, which has already taken hits from deeply discounting new phones and capital outlay on network equipment. The company now expects 2022 free cash flow of $14 billion – with around $1 billion of the reduced amount tied to the “timing of customer collections.”
The news, which overshadowed second-quarter results that beat on profit and wireless subscriber growth, also hit peers Verizon and T-Mobile, sending shares lower.
The company added 813,000 regular monthly phone subscribers in the second quarter, exceeding the 554,000 average estimate of analysts surveyed by Bloomberg. Earnings, excluding some items, topped estimates at 65 cents a share, while analysts were looking for 62 cents. Revenue in the quarter met estimates at $29.6 billion.
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