AT&T Q2 Earnings Preview: Wireless Growth, Free Cash Flow in Focus

AT&T is set to report Q2 earnings on July 23, with consensus expecting adjusted EPS of $0.53 and revenue of $30.5 billion, a 2% YoY increase. Wireless service revenue and postpaid net adds will be in focus, as well as free cash flow, which is expected to be $16 billion for the year. Management's comments on pricing, fiber expansion, and debt reduction will shape the stock's post-earnings trading.

AT&T (NYSE: T) is set to release its Q2 earnings on Wednesday, July 23, with analysts expecting adjusted EPS of $0.53 and revenue of $30.5 billion, representing a modest 2% year-over-year (YoY) increase. The stock has risen 18% year to date and is currently trading just 8% below its 52-week high.

The focus of investors and analysts will be on several key metrics. Wireless service revenue and postpaid net adds are expected to remain positive but at a slower pace than the robust growth seen in the previous quarter. In Q1, AT&T added 324,000 postpaid phone customers and grew mobility service revenue by 4.1% YoY. Analysts will be looking to see if these trends continued into Q2 or if industry-wide churn pressures, particularly from cable operators, began to exert more influence [1].

Free cash flow (FCF) will also be a critical metric. AT&T generated $3.1 billion in FCF last quarter and has reaffirmed its full-year guidance of $16 billion. Any deviation from this target or signs of increased capital expenditures (CapEx) could impact investor confidence in the dividend. Investors will be closely watching comments on fiber expansion, debt reduction, and whether the recent stabilization in churn reflects improving customer retention or simply seasonality [2].

Management's outlook on pricing, FCF trajectory, and wireless competition will significantly influence how shares trade post-earnings. Investors will be keen to understand how AT&T plans to navigate the competitive landscape and maintain its financial health.

References:
[1] https://ca.finance.yahoo.com/news/t-q2-preview-wireless-growth-124320226.html
[2] https://finance.yahoo.com/news/t-q2-preview-wireless-growth-124320226.html