AT&T added more mobile phone and home internet subscribers this summer than analysts expected, amid a heavy promotional push https://t.co/VqK547dP2W ...

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Core Insights - AT&T's revenue increased in the third quarter, despite lower-than-expected phone sales in its mobility business [1] Group 1: Financial Performance - The company reported an advancement in revenue during the third quarter [1] - Phone sales in the mobility segment were lower than anticipated [1]

Core Viewpoint - AT&T exceeded expectations by adding more wireless subscribers in Q3, driven by bundled plans and promotions related to the iPhone launch, leading to a 4% increase in shares during premarket trading [1]. Subscriber Growth - AT&T added 405,000 monthly bill-paying wireless subscribers, surpassing the expected 334,100 additions [2]. Bundled Services and Customer Retention - The company has successfully encouraged customers to adopt multiple services by offering discounts on bundled wireless and fiber broadband plans, with over 41% of fiber households also opting for mobile plans [3]. Strategic Moves - AT&T announced a significant $23 billion deal to acquire wireless spectrum licenses from EchoStar, aimed at enhancing its network capabilities [3]. Revenue and Financial Performance - Equipment revenue grew by 6.1% in Q3, driven by stronger phone sales, while operating costs in the mobility unit increased by 3.8% due to higher expenses from selling more expensive phones and increased marketing costs [4]. - Total revenue for Q3 was $30.7 billion, slightly below the estimated $30.87 billion [5]. - The business wireline unit experienced a 7.8% decline in revenue, impacted by decreases in legacy voice and data services [4]. - On an adjusted basis, AT&T earned 54 cents per share, aligning closely with estimates [4].

Financial Performance - Total operating revenues for Q3 2025 reached $30,709 million, a 1.6% increase from $30,213 million in Q3 2024[1] - Net income for the nine-month period of 2025 was $19,230 million, up 145.0% from $7,845 million in the same period of 2024[1] - Operating income for Q3 2025 was $6,119 million, a significant increase of 189.5% compared to $2,116 million in Q3 2024[1] - Basic earnings per share attributable to common stock for Q3 2025 was $1.29, compared to a loss of $0.03 in Q3 2024[1] - Total segment operating revenues for the nine-month period in 2025 were $3,120 million, down 2.1% from $3,188 million in 2024[16] - Total operating expenses for the nine-month period in 2025 were $55,066 million, a decrease of 5.0% from $58,050 million in 2024[18] Assets and Liabilities - Cash and cash equivalents increased to $20,328 million as of September 30, 2025, compared to $2,726 million at the end of 2024[4] - Total assets grew to $423,213 million as of September 30, 2025, up from $394,795 million at the end of 2024[2] - The company’s total current liabilities increased to $53,876 million as of September 30, 2025, from $46,872 million at the end of 2024[2] - The company reported a debt ratio of 52.0% for Q3 2025, slightly down from 52.2% in Q3 2024[5] Employment and Expenditures - The number of total employees decreased by 5.5% to 135,670 in Q3 2025 from 143,630 in Q3 2024[5] - Total capital expenditures for the nine-month period of 2025 were $14,061 million, a 4.8% increase from $13,420 million in 2024[5] Segment Performance - Mobility segment operating revenues increased by 3.1% to $21,713 million in Q3 2025, compared to $21,052 million in Q3 2024[7] - Business Wireline segment operating revenues decreased by 7.8% to $4,248 million in Q3 2025, down from $4,606 million in Q3 2024[12] - Consumer Wireline segment operating revenues rose by 4.1% to $3,555 million in Q3 2025, compared to $3,416 million in Q3 2024[14] - Total segment operating income for Q3 2025 was $7,096 million, a slight decrease of 0.8% from $7,156 million in Q3 2024[7] - Mobility operating income margin was 32.8% in Q3 2025, down from 33.3% in Q3 2024[9] - Consumer Wireline operating income increased by 65.8% to $325 million in Q3 2025, compared to $196 million in Q3 2024[14] - Business Wireline operating income margin was -8.3% in Q3 2025, a decline from -0.9% in Q3 2024[12] Subscriber Metrics - Total Mobility subscribers reached 118,982 thousand, reflecting a 2.5% increase from 116,066 thousand in Q3 2024[9] - Postpaid phone net additions were 405 thousand in Q3 2025, a slight increase of 0.5% from 403 thousand in Q3 2024[9] - Fiber broadband connections grew by 12.2% to 10,123 thousand in Q3 2025, up from 9,024 thousand in Q3 2024[14] - Mexico wireless subscribers increased to 24,149 thousand, a 5.4% growth from 22,911 thousand in 2024[16] - Postpaid net additions in Mexico for Q3 2025 were 243 thousand, a 74.8% increase from 139 thousand in Q3 2024[16] Corporate Costs and Losses - Corporate and other segment reported a loss of $999 million in Q3 2025, compared to a loss of $5,050 million in Q3 2024[17] - Total corporate costs, including DTV-related retained costs, amounted to $287 million in the nine-month period of 2025, compared to $337 million in 2024[18]

Core Insights - AT&T reported strong third-quarter results, highlighting continued customer demand for its wireless and fiber offerings, positioning the company to meet its full-year financial outlook [1][2] Financial Performance - Revenues for the third quarter totaled $30.7 billion, up 1.6% from $30.2 billion in the year-ago quarter, driven by higher Mobility, Consumer Wireline, and Mexico revenues [14] - Net income was $9.7 billion, including a $5.5 billion gain on the sale of the DIRECTV investment, compared to $0.1 billion in the year-ago quarter [14] - Adjusted EPS was $0.54, consistent with the year-ago quarter, while diluted EPS was $1.29, reflecting a significant gain from the DIRECTV sale [14][27] Segment Performance - Mobility service revenues grew 2.3% year over year to $16.9 billion, with operating income of $7.1 billion, up 1.7% [11] - Consumer Wireline revenues increased by 4.1% year over year, driven by a 16.8% increase in fiber revenue, resulting in operating income of $325 million [16][17] - Business Wireline revenues declined by 7.8% year over year, impacted by secular pressures on legacy services, although partially offset by growth in fiber services [12][15] Customer Growth and Strategy - AT&T added 405,000 postpaid phone net adds with a postpaid phone churn rate of 0.92% [6][11] - Over 41% of AT&T Fiber households also subscribed to AT&T Mobility, indicating strong convergence strategy execution [6][21] - The company continues to pursue an investment-led strategy, focusing on customer growth and enhancing connectivity offerings [2][5] Capital Management - AT&T repurchased $1.5 billion in common shares during the quarter, with over $2.4 billion repurchased under the 2024 authorization [6] - The company plans to maintain a consistent approach to capital returns and aims to reduce its net debt-to-adjusted EBITDA ratio over the coming years [5][35] Future Outlook - AT&T reiterated its full-year 2025 financial guidance, expecting consolidated service revenue growth in the low-single-digit range and adjusted EBITDA growth of 3% or better [5][6] - The company anticipates free cash flow in the low-to-mid $16 billion range and adjusted EPS in the higher end of the $1.97 to $2.07 range for 2025 [5][6]

Core Viewpoint - AT&T offers a strong income potential with a 4.25% dividend yield, significantly above the sector average, and is expected to report stable earnings despite anticipated profit declines [1][4][19] Financial Performance - Over the past year, AT&T's stock has increased by 18.76%, with a year-to-date rise of 13.86%, indicating improved management execution and cash generation [2] - In Q2, AT&T reported revenue of $30.8 billion and diluted EPS of $0.62, up from $0.49 a year earlier, with operating income at $6.5 billion and net income at $4.9 billion [6] - The company generated $9.8 billion in cash flow from operations and $4.4 billion in free cash flow, an increase from $4.0 billion the previous year [7] Business Segments - Mobility revenue grew by 3.5% to $16.9 billion, while fiber broadband revenue surged nearly 19% year-over-year to $2.1 billion, driven by the addition of 446,000 new connections [8] - The sale of AT&T's remaining 70% stake in DIRECTV has streamlined operations and allowed for more investment in 5G and fiber initiatives [8] Market Context - Telecom stocks have shown strong momentum, with traditional telecom companies averaging a 14.3% gain since the last reporting cycle, supported by optimism in the sector [5] - Global telecom spending is projected to increase by about 4% this year to approximately $1.42 trillion, indicating steady demand for connectivity [5] Analyst Sentiment - Analysts expect a 10% year-over-year drop in profit but remain optimistic about AT&T's ability to offset weaknesses in older business lines with growth in wireless and fiber [4] - The consensus among analysts is a "Moderate Buy" rating, with a mean price target of $30.65, suggesting an estimated 18% upside from the current stock price [17] Future Outlook - AT&T anticipates service revenue growth in 2025, with mobility revenue expected to rise by about 3% or more and consumer fiber broadband climbing in the mid-to-high teens [14] - The company plans to spend between $22 billion and $22.5 billion this year while generating around $16 billion in free cash flow [14]

Core Insights - AT&T and other phone carriers are experiencing increased profits due to a shift in consumer behavior away from traditional cable internet services towards fixed wireless internet options [1][3] Consumer Behavior - An average internet price increase of $20.78 per month in 2024 has led 75% of Americans to cancel, downgrade, or consider switching their internet providers [2] - Only 40.2% of consumers now rely on cable TV companies for internet service, down from 45% in late 2024, while reliance on 5G home internet has risen to 11% from 8.4% a year ago [4] Company Performance - AT&T gained 203,000 new customers for its 5G home internet service and 243,000 new fiber internet customers in the second quarter, contributing to an operating income of $6.5 billion, a 10% increase year-over-year [5] - Despite the growth in demand, AT&T announced a $5 increase in monthly bills for all internet plans starting December 1, 2025, affecting both new and existing customers [6][7]

Market Overview - US stock index futures showed mixed movements with Dow futures up 0.08% and S&P 500 futures up 0.03%, while Nasdaq futures fell 0.05% [1] - European indices also experienced gains, with Germany's DAX up 0.17%, UK's FTSE 100 up 0.30%, France's CAC40 up 0.55%, and the Euro Stoxx 50 up 0.26% [2][3] - WTI crude oil rose by 0.79% to $57.47 per barrel, and Brent crude oil increased by 0.67% to $61.42 per barrel [3][4] Market Sentiment - The recent rebound in US stocks is attributed to short covering rather than genuine investor confidence, indicating a potential "false prosperity" [5] - Concerns about the US credit market tightening could lead to forced selling by pension funds, which may trigger a significant market downturn [5] - Allianz's chief economist noted that the current AI investment boom is a "rational bubble" that could help the US outperform global markets [5] Federal Reserve Insights - Wall Street analysts predict that the Federal Reserve may announce the end of its balance sheet reduction plan in the upcoming meeting, which could stabilize monetary policy [6] - Recent market fluctuations have led to increased use of the Fed's repurchase agreement tool, indicating liquidity concerns [6] Individual Company Performance - General Motors (GM) reported Q3 revenue of $48.59 billion, exceeding expectations of $45.26 billion, and raised its full-year EPS guidance to $9.75-$10.50 [7][8] - Coca-Cola (KO) posted Q3 revenue of $12.46 billion, surpassing the expected $12.41 billion, and reaffirmed its 2025 guidance [8] - GE Aerospace's Q3 revenue increased by 24% to $12.18 billion, driven by strong performance in its commercial engine business [8] - Zion Bank's Q3 profit exceeded expectations, with revenue of $872 million, indicating that credit pressure in regional banks may be isolated incidents [8] - DocGo's stock surged nearly 27% following its acquisition of virtual healthcare platform SteadyMD [8] Upcoming Earnings Reports - Notable earnings reports expected include Netflix, Texas Instruments, and Alliance West Bank on Wednesday morning, and Barclays, Teck Resources, and AT&T before market open [10]

Core Insights - The upcoming earnings reports for AT&T, T-Mobile, and Verizon are anticipated to provide insights into competitive dynamics in the telecom sector, particularly against the cable TV industry by 2026 [1][2][12] - Verizon's unexpected CEO transition to Dan Schulman raises questions about the company's strategic direction and potential impacts on its dividend policy [3][4][6] Company-Specific Summaries AT&T - AT&T's stock has increased by 14% this year, aligning with the S&P 500, but has seen a decline since mid-September [1] - The company is focusing on fiber expansion and has returned to its core telecom operations by divesting from satellite TV and WarnerMedia [15] T-Mobile - T-Mobile is expected to lead in Q3 subscriber additions, with an estimated 840,000 postpaid phone subscribers, compared to AT&T's 332,000 and Verizon's 47,000 [9][10] - The company is undergoing a leadership transition with Srinivasan Gopalan set to take over as CEO on Nov. 1, following Mike Sievert [3][7] Verizon - Verizon appointed Dan Schulman as CEO, replacing Hans Vestberg, which analysts view as a significant and unexpected change [3][4] - Analysts suggest that Schulman may prioritize aggressive fiber expansion, potentially impacting free cash flow and leading to a suspension of dividend growth [5][6] - Verizon's consumer business is under pressure due to subscriber losses to competitors, and the company anticipates closing its $20 billion acquisition of Frontier Communications by early 2026 [5][6] Industry Trends - The wireless competition is intensifying, with increased subsidies and trade-in promotions as companies respond to the launch of higher-priced iPhone models [8] - Analysts predict that 2026 will be a pivotal year for the telecom and cable sectors, with heightened competition in consumer connectivity services [12] - Telecom companies are aggressively expanding fiber networks and fixed wireless broadband services, which may lead to pricing and margin pressures in the market [13]