TLDR
AT&T posted Q1 adjusted EPS of $0.57, beating the $0.55 consensus estimate
Revenue came in at $31.5 billion, up 2.9% year-over-year, above the $31.25 billion estimate
Postpaid phone net additions of 294,000 topped the 270,000 analyst estimate
The stock rose 0.8% following the results announcement
AT&T reaffirmed full-year 2026 guidance, including free cash flow of at least $18 billion
AT&T kicked off Wednesday with a solid Q1 report, topping Wall Street estimates on earnings, revenue, and subscriber growth.
Adjusted EPS came in at $0.57 versus the $0.55 expected. Revenue reached $31.5 billion, up 2.9% year-over-year, ahead of the $31.25 billion analyst estimate.
The stock edged up 0.8% after the results hit.
AT&T added 294,000 postpaid phone net subscribers in the quarter. Analysts had expected around 270,000 to 272,000, so this was a clean beat.
The bundling strategy is working. About 42% to 45% of AT&T home internet customers also subscribe to a wireless plan — a convergence play that has become a key selling point.
Total internet additions came in at 584,000 for the quarter. That was split evenly: 292,000 fiber and 292,000 fixed wireless subscribers.
AT&T and rival T-Mobile both extended device subsidies into Q1, competing hard for customers through iPhone deals and plan discounts.
Pricing Strategy
AT&T also raised prices on its lowest and highest wireless tiers. The goal is to push customers toward mid-range plans and lift average revenue per user.
Analysts say the move is more about nudging customers up the pricing curve than sparking a price war.
Segment Restructuring
Starting this quarter, AT&T reorganized its business into new segments to put more focus on core growth areas.
The new Advanced Connectivity segment — covering domestic 5G and fiber — reported roughly 5% revenue growth. Service revenue in that segment grew 3.6% year-over-year to $22.9 billion. Operating income jumped 14.8% to $6.9 billion.
Some of that growth came from the acquired mass markets fiber business from Lumen.
Free cash flow came in at $2.5 billion, down from $3.1 billion a year ago. The drop reflects higher capital spending as AT&T accelerates fiber deployment.
Capital expenditures for the quarter were $4.9 billion, up from $4.3 billion in the prior-year period.
CEO John Stankey called it the “best first quarter ever for Advanced Connectivity internet customer net additions.”
AT&T reaffirmed its full-year 2026 guidance: adjusted EPS of $2.25 to $2.35, EBITDA growth of 3% to 4%, and free cash flow of at least $18 billion.
The company also maintained its plan to repurchase approximately $8 billion in stock during 2026.
Comments
Log in or sign up to join the conversation.