What happened

Shares of AT&T (T 1.02%) were moving higher today as CFO Pascal Desroches made comments at an investor conference reaffirming the company's free-cash-flow guidance and tamped down concerns about the lead-contamination situation, reassuring investors that the company was on the right track.

As of 10:46 a.m. ET, AT&T stock was up 2.9%.

So what

For the third quarter, the company sees free cash flow of $4.5 billion to $5 billion and continues to target at least $16 billion in free cash flow for the full year. 

The company hadn't previously given guidance for third-quarter free cash flow, but the full-year forecast confirms earlier guidance.

In its second-quarter earnings transcript, the company had said that it expected $11 billion in free cash flow for the rest of the year, which will be weighted toward the fourth quarter, and Desroches' comments seem to confirm that as AT&T brought in $5.2 billion in free cash flow in the first half of the year.

Desroches also said the company was working with the EPA to investigate leftover lead-sheathed cables and reaffirmed comments from CEO John Stankey last week that there was not a public health crisis at the site The Wall Street Journal investigated.

Desroches also said that capital expenditures would moderate after this year, tracking with Verizon Communications and T-Mobile US, which should lift free cash flow.

A separate report also indicated that AT&T is the most aggressive in promotions for the three major telecoms for offers on the new iPhone 15, indicating the company is willing to trade profitability for customer growth.

Now what

AT&T is delivering postpaid phone subscriber additions, the most closely watched subscriber number in the industry. Mobility service revenue, which makes up roughly half of revenue, rose 4.9% in the second quarter.

AT&T stock has fallen sharply in recent years after misguided acquisitions, weak growth, and now the concerns about lead-sheathed cables, but the bar is now low enough that it won't take much for the stock to move higher from here.

The stock trades at a price-to-free cash flow of less than 7 based on its guidance for the year and offers a dividend yield of 7.4%. 

That's an enticing yield if the company can deliver steady, low-risk growth.