AT&T beats Q2 estimates with $0.65 EPS as subscriber growth accelerates

AT&T reported Q2 earnings of $0.65 per share, beating the $0.59 consensus by 10.7% as subscriber growth accelerated across its wireless and fiber businesses.

"We believe our network performance and operating scale can't be matched," Chairman and Chief Executive Officer John Stankey said in a statement.

Revenue rose 2.3% year over year to $31.6 billion, slightly below the $31.8 billion consensus. Adjusted EBITDA climbed 5.2% to $12.3 billion, while free cash flow increased to $4.7 billion from $4.4 billion a year earlier. The company's advanced connectivity segment, which includes domestic fiber and wireless operations, posted service revenue of $23.5 billion, up 5.1%, with operating income jumping 20.3% to $7.3 billion.

AT&T added 432,000 postpaid phone subscribers during the quarter, topping the 338,500 analyst estimate, with churn at 0.86%. Internet net additions totaled 646,000, including 367,000 fiber and 279,000 fixed wireless subscribers — a record for the two categories combined. The company now reaches 38.6 million fiber locations and reiterated its full-year guidance for adjusted EPS of $2.25 to $2.35 and free cash flow of at least $18 billion.

The results build on momentum from the first quarter, when AT&T added 294,000 postpaid phone net subscribers and 584,000 total internet net additions, also topping analyst expectations. First-quarter adjusted EPS of $0.57 cleared the $0.55 consensus estimate.

Revenue from legacy services dropped 26%, reflecting AT&T's ongoing wind-down of its copper infrastructure. Capital expenditures related to continuing operations were $5.7 billion during the quarter.

AT&T said it is accelerating planned share repurchases this year to approximately $10 billion, up from the roughly $8 billion it had outlined earlier. The company remains committed to distributing $45 billion or more to shareholders by 2028 through dividends and buybacks.

AT&T stock rose 1.41% on Wednesday following the release.

The accelerated buyback and maintained guidance signal management's confidence in sustained demand for fiber and wireless services. Investors will watch the company's progress toward its target of exceeding 40 million fiber locations by year-end 2026 and 60 million by 2030.

This article is for informational purposes only and does not constitute investment advice.