AT&T (T) Up 3.7% Since Last Earnings Report: Can It Continue?

Core Viewpoint - AT&T's recent earnings report showed modest results with healthy demand in mobility and broadband, but both adjusted earnings and revenues missed estimates, raising questions about future performance [2][3]. Financial Performance - AT&T reported a net income of $9.28 billion or $1.29 per share, a significant improvement from a net loss of $0.23 billion or a loss of $0.03 per share in the same quarter last year, primarily due to a $5.5 billion gain from the sale of DIRECTV investments [4]. - Adjusted earnings remained flat at 54 cents per share, missing the Zacks Consensus Estimate by one cent [5]. - Quarterly GAAP operating revenues increased by 1.6% year over year to $30.71 billion, but missed the consensus mark of $30.96 billion [6]. Subscriber Growth and Segment Performance - AT&T experienced solid wireless traction with 328,000 post-paid net additions, including 405,000 postpaid wireless phone additions, although postpaid churn was 1.07% [7]. - The Communications segment saw total operating revenues rise to $29.52 billion, up from $29.07 billion, driven by a 3.1% increase in Mobility revenues to $21.71 billion and a 4.1% increase in Consumer Wireline revenues to $3.56 billion [8]. - Revenues from the Mobility unit improved by 2.3% to $16.93 billion, while equipment revenues increased by 6.1% year over year to $4.79 billion [9]. 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 [12]. - 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 [12]. Future Guidance - AT&T aims to increase efficiencies and reduce 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 [13]. - 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 [14]. Market Sentiment - Estimates for AT&T have trended upward, with a consensus estimate shift of 6.83% in the past month [15]. - The stock has a subpar Growth Score of D and a Momentum Score of F, but a strong Value Score of A, placing it in the top 20% for this investment strategy [16].