AT&T stock (NYSE:T) is poised to report its Q2 2023 results on July 26. We expect revenue to come in at about $30.2 billion, an increase of just about 1% versus last year, and marginally ahead of consensus estimates. We estimate that earnings will stand at $0.62 per share, also slightly ahead of estimates. So what are some of the trends that are likely to drive the company’s results over the quarter? See our analysis of AT&T earnings preview for a closer look at what to expect when AT&T reports earnings.
AT&T’s closely watched postpaid phone business has been slowing down. Over Q1 2023, the company added just about 424,000 postpaid phone subscribers, down from 691,000 in the year-ago quarter. The company has also guided that it anticipates postpaid phone net adds in the second quarter to be about 100,000 lower than Q1 numbers. While this is partly due to the company dropping off a government contract of 75,000 postpaid phone lines that wasn’t sufficiently profitable, it’s also likely higher price competition in the wireless space is also impacting AT&T. Over the last quarter, postpaid churn saw an uptick to 0.99% versus 0.94% in the year-ago quarter. That said, AT&T’s fiber business should continue to fare well. In Q1, the company added a net of 272,000 AT&T Fiber customers.
Now, AT&T stock has underperformed considerably this year. The stock remains down by almost 20%, compared to the broader S&P 500 which remains up by about 15% over the same period. So does AT&T stock look attractive at current levels following the recent correction? We think it does. AT&T trades at just about 6x consensus 2023 earnings, well below historical levels. While the company’s $130 billion-plus in debt is a concern, the company is looking to boost cashflows. AT&T had projected cash flows of $16 billion or more for this year, with the company looking to slash about $6 billion in operational costs this year. We remain positive on AT&T stock with a $23 price estimate, which is well ahead of the current market price. See our analysis on AT&T Valuation for more details on what’s driving our price estimate for AT&T. For more details on AT&T’s key revenue streams and check out our analysis of AT&T Revenues: How Does T Make Money?
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 Month-to-date and year-to-date as of 7/14/2023
 Cumulative total returns since the end of 2016