AT&T (T, Financial) reports Q2 earnings pre-market on Wednesday, July 23. Street consensus sees adjusted EPS of $0.53 on revenue of $30.5 billion, reflecting a modest 2% YoY top-line increase. The stock has risen 18% year to date and now sits just 8% below its 52-week high.
The focus will remain on wireless service revenue and postpaid net adds, which are expected to remain positive but slower than the robust growth seen last year. In Q1, AT&T added 324,000 postpaid phone customers and grew mobility service revenue by 4.1% YoY. Analysts want to see if those trends held up in Q2 or if industry-wide churn pressures, especially from cable operators, began to weigh more heavily.
Perhaps the most critical metric is free cash flow. AT&T generated $3.1 billion last quarter and reaffirmed full-year guidance of $16 billion. Any deviation from that target, or signs of increased CapEx ($22 billion plus), could challenge investor confidence in the dividend. Investors will also be watching comments on fiber expansion, debt reduction, and whether the recent stabilization in churn reflects improving customer retention or just seasonality.
Management's read on pricing, FCF trajectory, and wireless competition will shape how shares trade post-earnings.
