AT&T rises as cash flow, Q2 profits exceed expectations
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AT&T (NYSE:T) shares rose more than 2% in pre-market trading on Wednesday after the Dallas-based telecom giant reported mixed second-quarter results but kept its full-year free cash flow outlook and committed to an additional $2B or more in savings. 
For the period ending June 30, AT&T (T) earned an adjusted 63 cents per share as revenue ticked up 0.9% year-over-year to $29.9B. 
Included in that was $20.3B from its mobility unit, as it added 326,000 postpaid phone subscribers during the period, below the estimate of approximately 397,000. Mobile service revenue grew 4.9% year-over-year, while the overall segment saw its best second-quarter ever in operating income.
In June, AT&T CFO Pascal Desroches said at an investor the conference the company expected new phone customers in the range of about 300,000.
Analysts were expecting adjusted earnings of 60 cents per share on $29.95B in revenue.
The company also added 251,000 subscribers to its AT&T Fiber internet service, with 14 straight quarters of 200,000 adds or more.
Led by CEO John Stankey, AT&T (T) added that it generated roughly $4.2B in free cash flow during the period - well above estimates of roughly $3.77B. The company said it expects to cut net debt by $4B this year, ending the year with a ratio of net debt to EBITDA of 3.
AT&T (T) also said it is committed to an additional $2B in cost savings over the next three years. 
Amid the stronger-than-expected free cash flow during the period, AT&T (T) reiterated that it expects to generate at least $16B in free cash flow for the full-year and it is confident in its guidance. 
Verizon (VZ), which reported second-quarter results yesterday, slipped fractionally in pre-market trading, as did T-Mobile (TMUS).
AT&T (T) will hold a conference call at 8:30 a.m. to discuss the results.
Ahead of the results, Seeking Alpha Investing Group Leader Dane Bowler laid out reasons he thinks AT&T (T) will struggle.
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