A man walks with an umbrella outside of AT&T corporate headquarters on March 13, 2020 in Dallas, Texas.
Ronald Martinez | Getty Images
AT&T shares fell Thursday after the company said its cash flow was hurt by customers’ later phone payments and company spending on building 5G infrastructure.
AT&T said customers have been paying their bills about two days later than they did the same time last year. That alone affected about $1 billion in quarterly cash flow, the company said.
“There’s clearly some dynamics in the economy. We have customers that are stretching out their payments a little bit,” AT&T CEO John Stankey told CNBC. “We expect that they’re going to continue to pay their bills, but they’re taking longer to do it. That’s not atypical in an economic cycle.”
Given its costs, including investments in subscriber growth, AT&T lowered its full-year free cash flow guidance from the $16 billion range to the $14 billion range.
Shares closed down almost 8% at $18.92.
For its second quarter, AT&T reported revenue of $29.64 billion, down from $35.7 billion in the year-earlier period. Excluding the impact of divestitures, operating revenue was up about 2%.
Analysts on average were expecting revenue of $29.55 billion, according to Refinitiv.
The company said its adjusted earnings were 65 cents per share, which was above the 61 cents analysts had expected.
As part of its plan to combat cash flow issues and the inflationary environment, AT&T said in May that it would begin to raise prices on older wireless plans, according to Bloomberg. It increased monthly fees by up to $6 a month on single-line plans and up to $12 a month on family plans.
“We went in there and said that we’re going to have to raise some prices on these long-standing plans,” Stankey said on CNBC Thursday.
Stankey also forecast “a more tepid economic environment moving forward,” but said the investments the company is making would “build the franchise for decades to come.”
Image and article originally from www.cnbc.com. Read the original article here.