AT&T Reports Strong Third-Quarter Financial Performance

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]