AT&T beats Q3 revenue and profit estimates, raises 2026 outlook

Overview

• US telecom provider's Q3 revenue rose 5.3% yr/yr, beating analyst expectations

• Adjusted EPS for Q3 beat analyst expectations, rising to $0.65 from $0.54

• Company raised 2026 adjusted EPS outlook and lowered long-term capital investment plans

Outlook

• AT&T raises 2026 adjusted EPS outlook to about $2.40

• Company expects 2026 free cash flow of $18 bln+, rising to $21 bln+ in 2028

• AT&T lowers long-term capital investment outlook to $23-24 bln in 2026, $22-23 bln in 2027-2028

Result Drivers

• ADVANCED CONNECTIVITY GROWTH - Revenue growth was driven by gains in Advanced Connectivity wireless service and equipment, and fiber revenues, including the impact of the acquired Lumen mass markets fiber business

• INTERNET AND POSTPAID PHONE NET ADDS - Record quarter for Advanced Connectivity internet net adds, with 769,000 additions including 442,000 fiber and 327,000 fixed wireless, and 379,000 postpaid phone net adds

• COST INCREASES - Operating expenses rose due to a non-cash impairment charge related to the held-for-sale Mexico wireless business, employee separation charges, increased wireless equipment costs, higher advertising, and higher bad debt expenses from subscriber growth

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 14 "strong buy" or "buy", 12 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the wireless telecommunications services peer group is "buy"

• Wall Street's median 12-month price target for AT&T Inc. is $28.00, about 19.6% above its October 20 closing price of $23.42

• The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 9 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)