To be sure, there were other negatives in the quarter. But obviously from a long-term perspective, those new customers can boost growth. Those new customers receive new devices, which in turn erodes short-term cash flow. But, as management explained on the Q2 conference call, some of the pressure on cash flow is coming precisely from the company’s success in acquiring new customers. Headlines suggest it was that lower guidance that led to the sell-off. Verizon Communications (NYSE: VZ) on Friday announced that it added just 12,000 net postpaid phone subscribers.Īdmittedly, AT&T reduced its guidance for free cash flow this year, to $14 billion from $16 billion. The company added 813,000 net postpaid phone subscribers in the quarter and more than 1 million net postpaid subscribers in total. Most notably, AT&T does seem to be competing better. That case seems potentially supported by Q2 earnings. That, in turn, would drive cash flow growth that would allow the stock to re-rate higher, and the company to increase an already generous dividend that at Wednesday’s closing price yielded 5.4% The case for T stock before earnings was that the end of a disastrous foray into entertainment would allow the newly slimmer company to better compete with wireless rivals. The news last Thursday doesn’t seem like it would shake the confidence of an investor who believed in the stock on Wednesday.

The issue with the AT&T earnings report is that it served as a reminder of precisely that history - and why it’s so dangerous to bet that this time is different. The problem with that argument, however, is that it requires viewing the Q2 report in a vacuum, rather than in the context of AT&T’s tortuous history over the past two decades.

Is att wireless down