AT&T Inc.’s T Thursday morning earnings report could provide a hint of what to expect this year. Wall Street forecasts for the company’s first-quarter postpaid net additions span a “wide” range, notes BofA Securities analyst David Barden, who pointed to estimates ranging from 150,000 to 500,000. His own outlook is for 485,000 net additions.AT&T Inc.’s T Thursday morning earnings report could provide a hint of what to expect this year.
“We expect AT&T to outperform on postpaid phone net adds this quarter as it benefits from its customer retention and acquisition tactics,” Barden wrote in a note to clients, adding that investors “await an industry postpaid phone subscriber ‘mean reversion'” from all-time highs in 2021 and 2022.When a subscriber switches carriers, one company’s gain is another’s loss.
AT&T has stepped up its relative performance in the past couple years, notching subscriber gains on the heels of promotions that apply the same to new customers as they do to existing ones, and what the company says is a more simplified messaging strategy around plans and pricing. While Keane expects a smaller level of first-quarter net additions for AT&T relative to last year — his estimates call for 344,000, versus 691,000 a year before — he still thinks the company’s net-addition growth will be “healthy” this year, and he sees room for possible upside.
“[M]anagement seems more bullish…and, consequently, we think there is some positive optionality here from stronger net adds,” he wrote.“We believe that industry switching levels have been reasonably robust in 1Q, and that if trends continue at a similar pace, wireless industry postpaid phone net adds could end up above 8M this year,” he wrote.