Shares of telecommunications company AT&T declined after the company issued its second-quarter earnings results. The company said that its cash flow had taken a hit from late phone payments from its customers, increased spending, and its investment in establishing 5G infrastructure.
The company saw its shares decline 8 percent, closing at $18.92 on Thursday.
For the second quarter, the company reported a revenue of $29.64 billion. Second quarter revenue was down from the $35.7 billion the company reported in the second quarter of 2021. Analysts had expected revenue to come in at $29.55 billion for the quarter, according to Refinitiv. Operating revenue, excluding the impact of divestitures, was up about 2 percent.
The company reported adjusted earnings per share of 65 cents surpassing the 61 cents per share that analysts had expected.
AT&T said that customers have been making payments about two days later than they did in the same period a year ago, adding that this had an impact on cash flow by about $1 billion for the second quarter. “There’s clearly some dynamics in the economy. We have customers that are stretching out their payments a little bit. We expect that they’re going to continue to pay their bills, but they’re taking longer to do it. That’s not atypical in an economic cycle,” AT&T CEO John Stankey said.
It is pertinent to know that the telecommunications company reduced its full-year free cash flow guidance to the range of $14 billion from a previous range of $16 billion.
In the second quarter, specifically in May, AT&T announced that it would be raising the prices on older wireless plans. This was a strategy the company employed to deal with cash flow challenges and manage the current inflation-plagued environment. Single-line plans went up by up to $6 a month while family plans went up by $12 a month. “We went in there and said that we’re going to have to raise some prices on these long-standing plans,” AT&T CEO John Stankey said.
The company’s CEO spoke about the investments being made by AT&T. He said that these investments would “build the franchise for decades to come.” He also did say that the company expects a tough economic environment moving forward.