AT&T Shares Jump 5% After Profit Outlook Tops Expectations

Core Viewpoint - AT&T has issued a profit forecast for the current year that surpasses Wall Street expectations, driven by strategic acquisitions aimed at enhancing its fiber and wireless infrastructure [1] Group 1: Strategic Transactions - The company announced a $6 billion acquisition of Lumen's consumer fiber operations and a $23 billion purchase of spectrum licenses from EchoStar, which are expected to enhance network capacity, improve mobile coverage, and boost broadband speeds [2] - These investments are anticipated to strengthen AT&T's competitive position as remote work and data-intensive usage continue to rise [2] Group 2: Service Bundling and Reporting Structure - AT&T is focusing on offering discounted bundles that combine wireless and fiber broadband services [3] - Starting in the first quarter, the company will report results across three operating segments, including a core domestic 5G and fiber unit that is projected to account for the majority of 2025 revenue [3] Group 3: Financial Projections - For fiscal 2026, AT&T projected free cash flow of at least $18 billion, increasing to $21 billion by 2028, which is above Wall Street expectations [4] - Adjusted earnings for the current year are forecasted in a range of $2.25 to $2.35 per share, compared to a consensus estimate of $2.23 [4] Group 4: Recent Performance - In the fourth quarter, AT&T reported adjusted earnings of $0.52 per share, exceeding expectations of $0.46, despite net additions of monthly bill-paying wireless subscribers being slightly below forecasts [5] - Revenue increased by 3.7% year over year to $33.5 billion, surpassing consensus expectations of $32.83 billion [5]