Core Viewpoint - Verizon Communications has shown strong performance in its recent earnings report, surpassing estimates in both adjusted earnings and revenues, indicating solid growth in its wireless and broadband segments [2][4][5]. Financial Performance - Verizon reported Q2 2025 net income of $5.12 billion, or $1.18 per share, compared to $4.7 billion, or $1.09 per share, in the prior year, reflecting a positive trend in top-line growth [4]. - Total operating revenues increased by 5.2% to $34.5 billion, driven by service revenue growth and higher wireless equipment revenues, exceeding the consensus estimate of $33.58 billion [5]. - Adjusted earnings for the quarter were $1.22 per share, beating the Zacks Consensus Estimate by 4 cents [4]. Segment Performance - The Consumer segment saw revenues rise by 6.9% year over year to $26.65 billion, with service revenues up 2.1% to $20.26 billion and wireless equipment revenues increasing by 29.6% to $5.37 billion [6]. - The Business segment experienced a slight decline in revenues, down 0.3% to $7.27 billion, attributed to lower wholesale and enterprise revenues, which was below estimates [9]. Subscriber Growth - Verizon achieved industry-leading wireless service revenues of $20.9 billion, up 2.2% year over year, and added 278,000 fixed wireless access subscribers, bringing the total to over 5.1 million [3]. - The company recorded 65,000 wireless retail postpaid net additions in the quarter, with a churn rate of 1.61% [10]. Cash Flow and Liquidity - For the first half of 2025, Verizon generated $16.76 billion in net cash from operating activities, with free cash flow of $5.17 billion for the quarter [13]. Guidance - Verizon expects wireless service revenue growth in the range of 2%-2.8% for 2025, with adjusted EBITDA growth projected at 2.5%-3.5% [14].

Core Viewpoint - AT&T is significantly enhancing its fiber internet strategy through a $5.75 billion acquisition of Lumen's Mass Markets fiber business, which will add approximately 1 million fiber subscribers and 4 million passed locations, expanding its presence in major metro areas [1][2]. Expansion Plans - Prior to the acquisition, AT&T aimed to pass 50 million fiber locations by the end of 2029; with the Lumen deal, this target has been raised to 60 million by the end of 2030, effectively doubling the current scale of its fiber network [2]. - The acquisition will allow AT&T to expand its fiber reach without incurring all the capital expenditures typically associated with such growth, as it plans to partner with an equity investor post-transaction [4][5]. Financial Strategy - AT&T intends to maintain a net debt to adjusted EBITDA ratio of around 2.5 after the Lumen deal closes and the equity partner is found, while also planning to repurchase $10 billion of its own shares through the end of 2026 [6]. - The company expects to generate free cash flow of at least $16 billion this year, with its stock trading at over 12 times free cash flow, indicating a solid value proposition despite not being as cheap as in previous years [11]. Growth Opportunities - Lumen's fiber business has a penetration rate of approximately 25%, significantly lower than AT&T's 40% and half of its long-term target of 50%. Improving this penetration rate presents a low-cost growth opportunity for AT&T [8]. - There is potential for AT&T to sell its wireless services to the 1 million acquired fiber customers, as about 40% of AT&T's fiber customers are also wireless customers, which could lead to lower churn and higher lifetime value [9]. Strategic Acquisition - The acquisition of Lumen's fiber assets provides AT&T with an immediate increase in fiber subscribers and a pathway to expand its fiber network beyond previous plans, while also ensuring financial prudence through equity partnerships [10].