(CTN News) – There was no doubt that AT&T beat Wall Street estimates for its second-quarter free cash flow on Wednesday after lowering costs and offering cheaper wireless monthly plans to attract wireless monthly subscribers paid off as it beat estimates.
According to Visible Alpha, the telecom firm reported a free cash flow of $4.2 billion in the three months ended June, compared to analysts’ estimates of $3.60 billion, during the period.
Through the implementation of a cost-cutting plan, the company slashed operating expenditures by more than $1 billion during the period reported, achieving an improvement over the first quarter.
The results indicated the benefits of measures such as reducing corporate offices, which reduced operating expenses by more than $1 billion.
On Wednesday, the company announced that it had exceeded its goal of cutting costs by $6 billion ahead of schedule and is now on track to cut costs by another $2 billion over the next three years.
It is essential for AT&T to have a lower cost bill since it needs a steady flow of cash in order to service its net debt amounting to $132 billion, as well as support a dividend that is among the highest in the United States.
At the same time, AT&T did not make any comments regarding the lead-clad cables in its statement, which made no mention of them.
The company’s stock price had been pressed after the Wall Street Journal reported on July 9 that AT&T and Verizon were among the telecom operators that abandoned a sprawling network of lead-clad cables, which might have contaminated water sources and soil, after they were found to be contaminated.
In the second quarter of 2008, the company added 326,000 postpaid phone subscribers to its system, which was in line with the AT&T prediction that Pascal Desroches made at a conference in June that the company would add in the low 300,000. Compared to a year ago, that figure was nearly 60% lower than what it was a year ago.
As a result of the pandemic outbreak, growth in the highly AT&T competitive U.S. telecom market has slowed significantly. This has caused companies to offer cheaper plans in an attempt to attract customers amid the economy uncertainty.
The company reported a 0.9% rise in revenue to $29.9 billion, in line with analysts’ expectations of $29.94 billion, according to Refinitiv data.