Why Shares of AT&T Popped in January
Shares of AT&T (NYSE: T) popped 10.6% in January, according to data from S&P Global Market Intelligence. The telecommunications company reported it had strong subscriber growth across its business lines in the fourth quarter, leading investors to bid up the stock. After the company spun off its entertainment division last year, investors are appreciating a more streamlined strategy to grow phone and broadband subscribers.
On Jan. 25, AT&T released its earnings results for the fourth quarter of 2022. The company outpaced analyst estimates for its mobile phone business, growing subscribers by 2.9 million in 2022 to 69.6 million. Its smaller fiber broadband business is showing strong growth as well, adding 1.2 million customers in 2022 and hitting 7.2 million total customers by year-end.
Steadily growing subscribers across its huge fixed cost base allows AT&T to generate consistent cash flows. In 2022, the company generated $14.1 billion in free cash flow, which management expects to grow to $16 billion in 2023. That conservatively covers its annual dividend, which is currently yielding 5.6%.
Source Fool.com
