T Misses Q3 Earnings & Revenue Estimates Despite Healthy Demand

Core Viewpoint - AT&T Inc. reported modest third-quarter 2025 results with strong mobility and broadband demand trends, but both adjusted earnings and revenues fell short of Zacks Consensus Estimates [1] Financial Performance - AT&T's net income on a GAAP basis was $9.28 billion or $1.29 per share, a significant improvement from a net loss of $0.23 billion or a loss of 3 cents per share in the same quarter last year, primarily due to a $5.5 billion gain from the sale of DIRECTV investments [3] - Adjusted earnings remained flat at 54 cents per share, missing the Zacks Consensus Estimate by a penny [4] - Quarterly GAAP operating revenues increased by 1.6% year over year to $30.71 billion, driven by higher Mobility service and equipment sales, but missed the consensus mark of $30.96 billion [5] Subscriber Growth and Segments - AT&T experienced solid wireless traction with 328,000 post-paid net additions, including 405,000 postpaid wireless phone additions, while postpaid churn was 1.07% [6] - Total segment operating revenues for Communications were $29.52 billion, up from $29.07 billion, with Mobility business revenues increasing by 3.1% to $21.71 billion and Consumer Wireline revenues up by 4.1% to $3.56 billion [7] - Revenues from the Mobility unit improved by 2.3% to $16.93 billion, while equipment revenues rose by 6.1% year over year to $4.79 billion [8] Cash Flow and Liquidity - For the first nine months of 2025, AT&T generated $28.96 billion in cash from operations, compared to $26.87 billion a year ago, with free cash flow for the quarter at $4.86 billion [11] - As of September 30, 2025, AT&T had $20.27 billion in cash and cash equivalents and long-term debt of $128.09 billion, with a net debt to adjusted EBITDA ratio of about 2.59X [11] Future Guidance - AT&T aims to increase efficiencies to lower operating costs while focusing on 5G and fiber-based connectivity, expecting wireless service revenues to improve by 3% or more and broadband revenues to grow in the mid to high-teens for 2025 [12] - Adjusted earnings are projected to be between $1.97 and $2.07 per share, with free cash flow expected to exceed $16 billion due to cost savings [13]