AT&T (NYSE:T) on Wednesday handily beat estimates for second-quarter free cash flow as efforts to lower costs and attract wireless monthly paying subscribers with cheaper plans paid off.
The telecom firm posted free cash flow of $4.2 billion in the three months ended June, compared with analysts’ estimates of $3.60 billion, according to Visible Alpha.
The results marked an improvement from the first quarter and showed the benefits of a cost-cutting plan that helped shave off more than $1 billion in operating expenses during the reported period through measures such as a reduction in office locations.
The company said on Wednesday it had achieved its $6 billion cost-cutting goal ahead of schedule and was now targeting another $2 billion-plus over the next three years.
A lower cost bill is crucial for AT&T as it needs a steady flow of cash to service its net debt of $132 billion and support a dividend that is among the highest for U.S. stocks.
Meanwhile, AT&T did not comment on the lead-clad cables in its statement. Its shares had come under pressure after the Wall Street Journal reported on July 9 that AT&T and Verizon (NYSE:VZ) were among telecom operators that abandoned a sprawling network of lead-clad cables, which might have contaminated water and soil.
T shares lost 16 cents, or 1.1%, to $14.63.
