AT&T shares fall for a third straight session on Wednesday, first-quarter revenue, earnings fall short of estimates due to pandemic impact

AT&T Inc’s (T) first-quarter revenue and earnings, reported on Wednesday, missed Wall Street estimates, as the impact of the coronavirus pandemic weighed on business performance.

The telecoms company pulled its full-year earnings forecast.

AT&T shares closed lower for a third consecutive trading session in New York on Wednesday. The stock went down 1.34% ($0.40) to $29.47, after touching an intraday low at $29.31, or a price level not seen since April 8th ($29.10).

Shares of AT&T Inc have retreated 24.59% so far in 2020 compared with a 13.35% loss for the benchmark index, S&P 500 (SPX).

In 2019, AT&T Inc’s stock went up 36.93%, thus, it outperformed the S&P 500, which registered a 28.88% gain.

Total operating revenue went down 4.6% year-on-year to $42.8 billion during the quarter ended on March 31st, while falling short of the median analyst estimate of $44.2 billion.

Revenue from AT&T’s WarnerMedia, which encompasses premium TV channel HBO and Turner, was reported to have decreased to $7.4 billion during the period from $8.4 billion in Q1 a year ago.

The telecoms giant reported a net postpaid phone subscriber growth of 163 000 during the first quarter. In comparison, analysts on average had expected an increase by 90 700 subscribers. At the same time, AT&T lost 897 000 premium TV subscribers.

The company said it had entered into a credit agreement for $5.5 billion in order to boost liquidity and reported net debt of $154.3 billion as of the end of March.

Meanwhile, net income attributable to common shareholders rose to $4.6 billion ($0.63 per share) during the first quarter, from $4.1 billion ($0.56 per share) in the year-ago period.

Earnings per share, which exclude special items, were reported at $0.84 during the latest quarter, while missing a consensus of estimates of $0.85 per share. According to AT&T, the COVID-19 pandemic reduced earnings per share by $0.05.

The coronavirus pandemic reduced the company’s EBITDA by $435 million, AT&T also said.

Analyst stock price forecast and recommendation

According to CNN Money, the 24 analysts, offering 12-month forecasts regarding AT&T Inc’s stock price, have a median target of $34.65, with a high estimate of $47.00 and a low estimate of $17.00. The median estimate represents a 17.58% upside compared to the closing price of $29.47 on April 22nd.

The same media also reported that at least 19 out of 30 surveyed investment analysts had rated AT&T Inc’s stock as “Hold”, while 8 – as “Buy”. On the other hand, 2 analysts had recommended selling the stock.

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