AT&T’s fiber additions come below expectations, results manage to top estimates

U.S. telecom AT&T (NYSE:T) reported a marginal profit beat, topped revenue estimates by a decent margin, and met expectations for key subscriber metrics except fiber net additions in the second quarter.

Shares of the company were down 3.4% in premarket NYSE trading on Wednesday.

In Q2, the company added 243,000 fiber subscribers, below the Bloomberg consensus estimate of 252,040. However, it added 479,000 wireless postpaid net subscribers, ahead of the Bloomberg estimates of 437,844, and wireless postpaid phone net adds of 401,000 vs. the estimates of 300,876.

Postpaid phone-only churn in Q2 was 0.87%, up 17 basis points year-over-year, compared to the consensus estimate of 0.82%.

Free cash flow, excluding DIRECTV, was $4.4B vs. $4B for the same period last year.

Net income attributable to common stock for the three months ended June 30 was $4.5B, or $0.62 per share, compared to $3.5B, or $0.49 per share, for the same period last year.

Excluding items, on a per-share basis, the Dallas, Texas-based company earned 54 cents, beating the consensus estimate by just 1 cent.

Revenue rose 3.6% to $30.85B and was ahead of the consensus mark by nearly $400M.

“AT&T’s Q2 outperformance lies not only in the double revenue and earnings beat, alongside a raised growth guidance for certain services, but also in the significant subscription net adds and share gains across consumer mobility and broadband,” Seeking Alpha analyst Livy Investment Research said in their early reaction to the report.

The SA analyst said AT&T’s results also differ from Verizon’s (VZ) Q2 beat and raise, “which showed underlying weakness with persistently higher-than-expected churn, alongside weak subscription gains in its comparable consumer offerings.”

For 2025, AT&T continues to forecast consolidated service revenue growth in the low-single-digit range, adjusted EPS in the $1.97 to $2.07 range (midpoint $2.02) vs. $2.09 consensus, along with adjusted EBITDA growth of 3% or better.

It now sees mobility service revenue growth of 3% or better and consumer fiber broadband revenue growth in the mid-to-high teens.

Capex for 2025 is expected to be in the $22B to $22.5B range and FCF in the low-to-mid $16B range.

The company said it expects to realize $6.5B to $8B of cash tax savings from 2025 through 2027 due to tax provisions in the “One Big Beautiful Bill Act,” reflecting savings of $1.5B to $2B this year and $2.5B to $3B per year in 2026 and 2027.

AT&T said it will invest $3.5B of these savings into its network to accelerate its fiber internet build-out to a pace of 4M locations per year.

By the end of 2030, the company expects to reach about 50M customer locations with its in-region fiber network and more than 60M fiber locations when including the Lumen Mass Markets fiber assets.