(Bloomberg) -- AT&T Inc. raised its free cash flow guidance for the full year after posting mobile subscriber gains and profit that beat analysts’ estimates, sending the shares surging. 

The company forecast full-year free cash flow of about $16.5 billion, compared with previous guidance of $16 billion or better. It also raised expectations for adjusted earnings before interest, taxes, depreciation and amortization to a more than 4% increase. 

The outlook signals that AT&T may be gaining back some ground amid the broader headwinds that the telecom industry is facing as new mobile customer demand slows. The company and rivals Verizon Communications Inc. and T-Mobile US Inc. have fiercely fought to steal away each other’s customers in recent years in a desperate hunt for growth. AT&T said in June that gains had slowed in part due to competition from other carriers and cable TV.

The shares rose 7.3% at 10:45 a.m. in New York. 

Average revenue per user “growth is being driven largely by migration into higher-speed plans where customers are moving up in the continuum,” Chief Executive Officer John Stankey said on the company’s earnings call Thursday. He added that increased prices helped contribute to the overall cash flow growth. Chief Financial Officer Pascal Desroches said that the higher-rate plans had higher margins.

AT&T’s third-quarter adjusted earnings were 64 cents per share, the No. 3 US wireless carrier said in a statement, above the 62 cents per share average of analysts’ estimates. Revenue gained 1% to $30.4 billion from last year.

The updated cash flow guidance suggests AT&T is “on track to meet debt-reduction goals while maintaining its dividend,” Bloomberg Intelligence analyst John Butler said, adding: “The company’s two main growth engines — wireless and broadband — posted strong results,” showing the health of the business.

AT&T continues to face hurdles. The Dallas-based company’s stock has fallen roughly 20% this year through Wednesday’s close. It’s dealing with a challenging restructuring effort, a heavy debt load and the potentially high costs of cleaning lead out of its old copper phone network. 

The company said it reduced debt by $3 billion in the quarter, and 95% of its debt is fixed at a rate of 4.2% with a weighted average maturity of 16 years. 

It’s also behind its rivals in building out a nationwide 5G network and launched a home wireless plan in August.

The third-quarter gain in customers may help. The company added 468,000 net new mobile subscribers, reversing four consecutive quarters of declining subscription growth and topping estimates. And free cash flow was $5.2 billion, beating analysts’ estimates of $4.6 billion.

“The company is seeing low levels of churn and continuing customer growth, even amid an increasingly mature and saturated market,” Third Bridge analyst Jamie Lumley said in a note. “However, the 468k net adds does continue the trend of slowing growth; the question remains how much longer until the party is over.”

Apple Inc.’s new iPhone 15, the promotions for which could help lure new mobile subscribers, was released toward the end of September, and the effects of those deals won’t be seen until the fourth quarter. 

Read More: AT&T, T-Mobile Offer Free iPhone 15 in Lure for New Subscribers

(Updates with shares in fourth paragraph and executive and analyst comments starting in fifth paragraph.)

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