AT&T Likely Added Mobile Subscribers at Fastest Rate in a Decade

AT&T (T), the world's second-largest telecommunications company by sales, likely recorded its fastest rate of wireless subscriber growth in over a decade in the first quarter, about a year after spinning off its WarnerMedia entertainment unit to focus on its core communications business.

Net income in the first quarter is projected to be $4.3 billion, or 61 cents a share, down 4% from the same quarter last year, according to analyst estimates compiled by Visible Alpha. Operating revenues likely fell 20.5% from the year-ago quarter to $30.3 billion on account of the WarnerMedia spin-off in April 2022. Operating costs are also projected to fall 27% to $19.6 billion. AT&T reports its first-quarter earnings before markets open Thursday, April 20.

Investors will be looking at the effects of cost-cutting measures as well as top-line growth, especially in AT&T's wireless unit, which accounts for more than two-thirds of total revenue. Wireless subscriptions with AT&T steadily increased in the years leading up to and during the pandemic until the first quarter of last year when total subscribers fell for the first time since 2016.

AT&T is expected to have ended the quarter with more than 221 million wireless subscribers, a 12.5% year-over-year increase. That would be the fastest rate of subscriber growth in more than a decade.

To be sure, AT&T's average revenue per unit (ARPU) has decreased in the last decade even more steadily than total subscribers have increased. ARPU was $45.31 in the first quarter of 2014. Analysts expect AT&T to post ARPU of $23.63 last quarter, compared with $24.64 in the same quarter last year.

AT&T shares are up 7.5% year-to-date, underperforming the broader S&P 500 Communication Services sector, which has returned 21.4% over the same period.