AT&T's Q1 Operating Cash Flow and Free Cash Flow Got A Boost - Does It Make A Case For Higher Dividends?
Portfolio Pulse from Anusuya Lahiri
AT&T Inc. reported a slight decline in Q1 2024 operating revenues to $30.03 billion, missing consensus estimates. However, adjusted EPS of $0.55 exceeded expectations, leading to a stock price increase. The company saw declines in Mobility equipment revenues and Business Wireline revenues but reported increases in wireless net adds, AT&T Fiber net adds, and improved churn rates. Adjusted EBITDA rose to $11.0 billion, with significant increases in operating cash flow and free cash flow. AT&T's focus under CEO John Stankey has been on its core communications services, recovering from recent incidents including a network outage and a security breach. The company maintains its FY24 outlook with expected growth in wireless and broadband revenues, and reaffirms its 2025 EPS growth guidance. AT&T stock is accessible through ETFs like RSPC and XLC.
April 24, 2024 | 1:00 pm
News sentiment analysis
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POSITIVE IMPACT
Invesco S&P 500 Equal Weight Communication Services ETF, which includes AT&T, may see positive sentiment due to AT&T's Q1 performance and outlook.
As AT&T is part of the RSPC ETF, its positive earnings report and reaffirmed growth outlook could lead to improved sentiment towards the ETF, potentially boosting its performance.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 60
POSITIVE IMPACT
AT&T reported mixed Q1 2024 results with a slight revenue miss but higher EPS and significant increases in cash flows, potentially signaling higher dividends or stock buybacks.
The increase in EPS and cash flows despite a slight revenue miss indicates a strong operational performance, which could lead to increased investor confidence and potential for higher dividends or stock buybacks, positively impacting the stock price.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100
POSITIVE IMPACT
The Communication Services Select Sector SPDR Fund, holding AT&T, might experience positive effects from AT&T's Q1 earnings beat and optimistic future guidance.
Given AT&T's influence within the XLC ETF, its better-than-expected Q1 results and positive outlook for FY24 and beyond could attract positive investor sentiment towards the ETF.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 60