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AT&T expects to pour in $24 billion in capital expenditure partly to grow 5G infrastructure.
David Paul Morris/Bloomberg
AT&T
‘s fourth-quarter earnings beat Wall Street’s estimates. A key metric for the wireless company also came in higher than expected.
For
AT&T
(ticker: T), the driver this earnings season is free cash flow. The company reported $14.1 billion in cash flow for 2022, slightly higher than management’s prior guidance and the $13.8 billion estimate among analysts tracked by FactSet. AT&T set the 2023 forecast at $16 billion or more, matching estimates of $16.2 billion. Wall Street predictions for AT&T’s cash flow this year are down nearly 20% from the middle of last year.
“We are well positioned to stand a challenging economy,” AT&T’s Chief Financial Officer Pascal Desroches told Barron’s in an interview Wednesday.
AT&T investors love the stock’s dividend payouts and the free cash flow that funds it. The company currently pays $1.11 in annual dividends per share, or a 5.8% dividend yield based on Tuesday’s closing prices—far above the
S&P 500
‘s dividend yield of 1.6%.
In February 2022, the company cut its dividend by 47%, after spinning off
WarnerMedia
.
Later, it lowered the outlook for 2022 free cash flow twice. Inflation as well as delays in collecting payments were the problem. The stock is down 4% over the past year, and missing an already lowered forecast would have further agitated investors.
“The security of that dividend is…
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