In response to questions, AT&T CEO John Stankey said that the carrier has seen a lot of growth in its wireless segment and a lot of that growth has been due to FirstNet.

“Look we’ve been getting our fair share in that segment and a lot of that’s been out of FirstNet and I don’t expect that trend to necessarily abate even in a relatively down economic cycle,” he said. 

AT&T also reported third-quarter results that showed strong, sustained momentum in customer additions across its growing 5G wireless and fiber networks. 

“We’re investing at record levels to enhance our 5G and fiber connectivity and to deliver the best experience available in the market,” Stankey said. “Our results show our strategy is resonating with customers as we continue to see robust levels of postpaid phone net adds and approach 1 million AT&T fiber net adds for the year.” 

Revenues from continuing operations for the third quarter totaled $30 billion versus $31.3 billion in the year-ago quarter, down 4.1%, reflecting the impact of the U.S. video separation in July 2021. Excluding the impact of U.S. Video, operating revenues for standalone AT&T were up 3.1%, from $29.1 billion in the year-ago quarter. This increase primarily reflects higher mobility revenues, and to a lesser extent consumer wireline and Mexico, partly offset by lower business wireline revenues. 

Operating expenses from continuing operations were $24 billion versus $25.1 billion in the year-ago quarter. The prior-year quarter included one month of U.S. Video results, as well as 3G network shutdown costs. These declines were partially offset by increased mobility costs, including wireless equipment from increased sales and mix of higher-priced smartphones. Operating income from continuing operations was $6 billion versus $6.2 billion in the year-ago quarter. When adjusting for restructuring charges and certain other items, adjusted operating income from continuing operations was $6.2 billion versus $6.4 billion in the year-ago quarter. When excluding the impacts of prior-year dispositions, standalone AT&T adjusted operating income totaled $5.8 billion in the year-ago quarter. 

Income from continuing operations was $6.3 billion versus $5 billion in the year-ago quarter. Diluted earnings per common share from continuing operations was $0.79 versus $0.63 in the year-ago quarter. Adjusting for ($0.11), which includes an actuarial gain on benefit plans, tax-related items, a proportionate share of intangible amortization from the DIRECTV equity method investment and other items, earnings per diluted common share from continuing operations was $0.68. Adjusted earnings per diluted common share from continuing operations was $0.66 in the year-ago quarter. 

On a standalone AT&T comparative basis, adjusted earnings per diluted common share was $0.62 in the year-ago quarter. The company now expect its adjusted earnings per share from continuing operations for the full year to be $2.50 or higher. 

Cash from operating activities from continuing operations was $10.1 billion, up $0.8 billion year over year. Capital expenditures from continuing operations were $5.9 billion in the quarter, up $1.5 billion year over year. Capital investment from continuing operations, which includes $0.9 billion of cash payments for vendor financing, totaled $6.8 billion. 

Free cash flow from continuing operations was $3.8 billion for the quarter. At the end of the third quarter, net debt was $131.1 billion with net debt-to- adjusted earnings before interest, taxes, debt and amortization (EBITDA) of 3.22x.

Third-quarter revenues for communications were $29.1 billion, up 3.2% year over year primarily due to increases in mobility and, to a lesser extent, consumer wireline, which more than offset a decline in business wireline. Operating income was $7.6 billion, up 6.5% year over year, with operating income margin of 26.2%, compared to 25.4% in the year-ago quarter. 

For mobility, revenues were up 6% year over year to $20.3 billion due to higher service and equipment revenues. Service revenues were $15.3 billion, up 5.6% year over year, primarily driven by subscriber and postpaid average revenue per user (ARPU) growth. Equipment revenues were $4.9 billion, up 7.2% year over year, driven by increased sales and mix of higher-priced smartphones. 

Operating expenses were $13.9 billion, up 5.4% year over year due to higher equipment costs, higher bad debt expense, higher sales costs, increased amortization of customer acquisition costs, higher network costs and the elimination of Connect America Fund Phase II (CAF II) government credits, partly offset by the absence of 3G network shutdown costs versus the third quarter of 2021. 

Operating income was $6.4 billion, up 7.2% year over year. Operating income margin was 31.7%, compared to 31.3% in the year-ago quarter. EBITDA was $8.5 billion, up 5.5% year over year with EBITDA margin of 41.7%, down from 41.9% a year ago. EBITDA service margin* was 55.2%, consistent with the year-ago quarter.