AT&T forecasts annual profit below Wall Street estimates

WASHINGTON: AT&T Inc forecast annual profit below Wall Street expectations on Wednesday, joining rival Verizon in bracing for a slowdown in wireless customer growth amid rising competition.

Signs of an economic recession are prompting US companies to streamline their operations and issue cautious forecasts as they anticipate a drop in demand from customers cuting back on spending.

AT&T said it was expecting earnings for 2023 in the range of $2.35 and $2.45 per share, compared with analysts’ estimates of $2.56 per share, according to Refinitiv data.

However, its renewed focus on the telecoms business ater shedding media assets last year, helped boost its subscriber numbers.

The US carrier added 656,000 postpaid phone subscribers in the latest quarter, above Factset estimates of 644,800 additions. Analysts and investors closely watch postpaid numbers as customers opting for those plans pay a recurring monthly bill, making them valuable to the carriers.

AT&T has also ramped up competition with Verizon and T-mobile for subscribers through aggressive promotions on plans and trade-in deals for handsets.

It posted a loss from continuing operations of $23.1 billion, or $3.20 per share, in the fourth quarter, ater taking a $25 billion impairment charge primarily due to rising interest rates and asset impairments.

Excluding items, the company earned 61 cents per share, above expectations of 57 cents per share profit.

Wireless service revenue growth for the year is expected to be 4 per cent or higher, AT&T said.

Shares of the US wireless carrier were up nearly 2 per cent in premarket trading.

Larger rival Verizon forecast annual profit below expectations on Tuesday, and said it was expecting wireless service revenue to grow between 2.5 per cent and 4.5 per cent in 2023.

AT&T is an American multinational telecommunications holding company headquartered at Whitacre Tower in Downtown Dallas, Texas. It is the world’s largest telecommunications company by revenue and the third largest provider of mobile telephone services in the US.

As of 2022, AT&T was ranked 13th on the Fortune 500 rankings of the largest United States corporations, with revenues of $168.8 billion.