Key Highlights
- AT&T delivered Q1 adjusted earnings per share of $0.57, surpassing the consensus forecast of $0.55
- Quarterly revenue totaled $31.5 billion, representing a 2.9% year-over-year increase and exceeding the $31.25 billion projection
- Postpaid phone subscriber net gains reached 294,000, outperforming the analyst consensus of 270,000
- Shares climbed 0.8% in response to the earnings release
- AT&T maintained its full-year 2026 outlook, projecting free cash flow of no less than $18 billion
AT&T started Wednesday on a strong note with first-quarter results that exceeded Wall Street’s projections across key metrics including earnings, revenue, and customer acquisition.
The telecommunications giant reported adjusted earnings per share of $0.57, compared to analyst expectations of $0.55. Quarterly revenue hit $31.5 billion, marking a 2.9% year-over-year improvement and surpassing the Street’s $31.25 billion forecast.
Shares advanced 0.8% following the earnings announcement.
The company welcomed 294,000 net postpaid phone subscribers during the three-month period. Wall Street analysts had anticipated additions in the range of 270,000 to 272,000, making this a noteworthy outperformance.
The telecom provider’s bundling approach continues to gain traction. Between 42% and 45% of AT&T’s home internet subscribers maintain a wireless service plan as well — a convergence strategy that has emerged as a crucial competitive advantage.
Overall internet subscriber additions totaled 584,000 for the quarter, distributed equally between fiber and fixed wireless access: 292,000 each.
AT&T and competitor T-Mobile both maintained device subsidy programs throughout Q1, engaging in aggressive competition for market share through iPhone promotions and service plan incentives.
Price Adjustment Strategy
AT&T implemented price increases on its entry-level and premium wireless service tiers. The strategic objective centers on steering subscribers toward mid-tier offerings while boosting average revenue per user metrics.
Industry analysts interpret the adjustment as a calculated effort to optimize customer value rather than initiating broader industry pricing competition.
Business Unit Realignment
Beginning this quarter, AT&T restructured its operational divisions into refreshed segments designed to emphasize primary growth engines.
The newly established Advanced Connectivity segment — encompassing domestic 5G and fiber operations — generated approximately 5% revenue expansion. Service revenue within this division increased 3.6% year-over-year to $22.9 billion. Operating income surged 14.8% to $6.9 billion.
Portion of this expansion stemmed from the mass markets fiber business acquisition completed with Lumen.
Free cash flow registered at $2.5 billion, declining from $3.1 billion in the comparable year-ago quarter. The reduction reflects elevated capital investment as AT&T intensifies fiber network expansion efforts.
Capital expenditures during the quarter totaled $4.9 billion, up from $4.3 billion in the prior-year comparable period.
CEO John Stankey characterized the performance as the “best first quarter ever for Advanced Connectivity internet customer net additions.”
AT&T confirmed its full-year 2026 financial guidance: adjusted earnings per share ranging from $2.25 to $2.35, EBITDA expansion of 3% to 4%, and free cash flow of at least $18 billion.
The telecommunications provider also reaffirmed its commitment to repurchase approximately $8 billion in shares throughout 2026.
