Earnings
AT&T lifts 2026 profit forecast to about $2.40 a share after record internet additions, but shares slip premarket
The carrier beat third-quarter revenue and earnings estimates and signed up 769,000 internet customers, while a $2.6 billion Mexico impairment cut reported profit.
HedgeWeekly News Desk ·
AT&T raised its 2026 adjusted earnings forecast to about $2.40 a share on Wednesday, up from a previous range of $2.25 to $2.35 and above the $2.34 analysts had pencilled in, after third-quarter revenue rose 5.3% to $32.3 billion. Wall Street had expected about $31.69 billion in sales, according to LSEG data cited by Reuters.
Adjusted earnings came to 65 cents a share, against 54 cents a year earlier and a 60-cent consensus. Reported earnings from continuing operations fell to 13 cents a share from $1.29, a comparison distorted by last year's gain on the DIRECTV sale and by a $2.6 billion non-cash impairment tied to the agreed sale of AT&T's Mexico wireless business. Adjusted EBITDA grew 5.4% to $12.5 billion and free cash flow edged up to $5.0 billion.
Internet growth carried the quarter. AT&T added 442,000 fiber and 327,000 fixed-wireless customers, a record 769,000 in total, alongside 379,000 postpaid phone subscribers, almost exactly the 379,300 FactSet consensus, with phone churn of 0.92%. Despite the beat, the shares were down 3.3% in premarket trading shortly after the 6:30 a.m. ET release, Investing.com reported.
For income and credit investors, the balance sheet is the thing to track. Closing the EchoStar spectrum deal lifted total debt to $159.6 billion, and AT&T expects net debt to return to about 2.5 times adjusted EBITDA during 2029. Over the same period it plans to return more than $45 billion to shareholders from 2026 to 2028, including about $10 billion of buybacks this year, while capital investment steps down from $23 billion to $24 billion in 2026 to $22 billion to $23 billion a year in 2027 and 2028. Free cash flow targets of more than $18 billion this year, rising to more than $21 billion in 2028, were kept. Reuters noted that about 43% of households signing up for AT&T internet also take a wireless plan, a ratio worth watching as the company leans on bundles to support both payouts and debt reduction.