AT&T already reported its second quarter earnings. The telecommunications giant made analysts think that it is a good investment considering the revenue that it posted.
AT&T's earnings climbed by 1.6% or U$600 million to U$32.1 billion in the last quarter compared from the same period in 2012. The wireless business' smartphone sales were up by 5.7% while its wire-line business also increased by 2.4% on new U-Verse subscribers. AT&T earned US$9.5 billion in free cash flow. The amount came from operating activities. The U-verse division of AT&T made up one-half of its revenue compared with one-third in 2012. U-verse currently has 9.4 million subscribers. Moreover, AT&T's net profit margin was 9.5% and it paid nearly 60% of free cash flow in dividends. At present, AT&T yields 5.1% in dividends.
AT&T reacquired more than 300 million stocks this quarter. It returned up to US$5.7 billion through repurchases and buybacks to its stockholders. If a corporation reacquires stocks, it no longer needs to pay dividends on the stocks. Therefore, AT&T could save around US$150 million in dividend expenditures each quarter.
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