Today we're going to talk about the largest radio service provider in the United States.$AT&T (T.US)$。

AT&T Inc (formerly an acronym for American Telephone & Telegraph and the Chinese translation of AT & T, but no longer uses his full name) is the largest radio communication service provider in the United States, mainly for businesses, governments and individual users.Wireless services, data communication services, advertising services, mobile devices and digital television services等。

AT&T Inc's predecessor was the Bell telephone Company founded by Bell in 1877. With the Bell system formed by the Bell telephone Company founded by Bell, the "father of the telephone", it monopolized the American telecommunications industry for a hundred years, and was later split because of its excessive monopoly.

Before the US stock market opened on October 20, the company announced its Q3 results for 2022.The results showed that Q3 had revenue of $30 billion, $140 million higher than market expectations, down 4.2% from a year earlier, and earnings per share of $0.68, or $0.07 higher than market expectations.

The past five years have been a failure for AT&T Inc's shareholders, who have been criticized for mismanagement and huge debts. The performance of the stock price also speaks for itself, seriously lagging behind the three major indices, and the stock price has fallen nearly 40% over the past five years.

Over the past 10 trading days, however, the company's shares have risen nearly 24 per cent. Is it rebounding or reversing? Is it still worth investing?

Q3 recorded the best growth in nearly a decade, with strong growth in optical fiber users

In the mobile business, the company's revenue grew 6.0% year-on-year in the quarter. Of this total, revenue from services increased by 5.6% over the same period last year, and revenue from equipment increased by 7.2%. Revenue from wireless services increased by 5.6%.This is the best growth in more than a decade.。

5G and optical fiber are the biggest growth drivers of AT&T Inc, Q3The net increase of the company's optical fiber subscribers is 338000.It increased by 49000 compared with the same period last year, and the net increase exceeded 200000 for the 11th consecutive quarter. The growth in the quarter was the second best in the history of the company's optical fiber business, with a record 6.9 million total users and an increase of 1.2 million new users compared with last year.

The number of Q3 post-paid mobile phone users increased by 708000On the contrary, colleagues$Verizon (VZ.US)$It added only 8000 users in the quarter, sending its share price to its lowest level in 12 years.

Stable cash flow and dividend, strong anti-risk ability

AT&T Inc has maintained a steady free cash flow for the past five years.Investors pay more attention to stable and predictable free cash flow in a recession than in an expansion period.。

AT&T Inc's dividend has been growing for more than 25 years and is a well-deserved dividend aristocrat. Over the past decade, dividends have grown at a compound annual growth rate of about 1.6 per cent, compared with a compound annual growth rate of about 1.4 per cent over the past five years.

With the US recession in 2022, consumers will spend less on discretionary spending, butWill not stop using mobile / Internet services. Communication services that everyone needs, and this is not an industry with low barriers to entry.

In a period of growth, investors are willing to tolerate higher risks, while in a recession, free cash flow becomes more important to investors. Abundant and stable free cash flow and dividends have improved AT&T Inc's ability to resist risks.

Continue to reduce the debt burden and improve year-round guidance

Following Q2's aggressive debt reduction, the company continued to reduce its debt in Q3, abiding by its financial discipline and commitment to debt reduction.

Long-term debt fell 18 per cent to $123.85 billion from $151.01 billion in the same period last year, while one-year debt fell 61 per cent to $9.626 billion from $24.62 billion in the same period last year.

If you look at the data alone, you may think that the company is still heavily in debt, but it is actually under control. Management's commitment to deleveraging is serious and takes action. Pascal Desroches, chief financial officer, pointed out, "AT&T Inc has very little pressure on the debt due in the next few years."It is easy to be covered by the rest of the free cash flow after the dividend is distributed.」

What do analysts think?

After the Q3 performance, the investment company Raymond James will rate AT&T Inc.From "increasing holdings" to "strong buying"With a target price of $24。

Analyst Louthan said that in economic downturns, the performance of the telecommunications industry tends to be "worse than expected"But AT&T Inc has digested a lot of downside risks.Because the company's price-to-earnings ratio is lower than the average price-to-earnings ratio of 2 years, 5 years and 10 years. Although we still remind investors that telecom stocks may not be the most defensive, we expect AT&T IncThe fundamentals of telecom business will certainly not soften.。