AT&T Q2 Results Beat Street; Now Sees FY25 Earnings Inline Or Below Market; Stock Down

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(RTTNews) - Telecom giant AT&T, Inc. on Wednesday reported higher second-quarter profit and revenues, both above market estimates. Further, the firm maintained its fiscal 2025 adjusted earnings outlook, in line or below market, as well as long-term financial outlook.

In the pre-market activity on the NYSE, AT&T shares were losing around 3.7 percent to trade at $26.38.

John Stankey, AT&T Chairman and CEO, said, "The milestones achieved this quarter - from passing more than 30 million customer locations with fiber and eclipsing 1 million total AT&T Internet Air customers, to our agreement to acquire substantially all of Lumen's Mass Markets fiber business - strengthen the industry's best and leading connectivity portfolio."

Looking ahead to fiscal 2025, the company continues to project adjusted earnings in a range of $1.97 to $2.07 per share on consolidated service revenue growth in the low-single-digit range.

The Wall Street analysts on average expect the company to report earnings of $2.07 per share. Analysts' estimates typically exclude special items.

Adjusted EBITDA growth is still expected to be 3 percent or better.

Meanwhile, AT&T revised mobility service revenue growth outlook, now expecting 3 percent or better growth, compared to previous outlook in the higher end of the 2 percent to 3 percent range.

Further, Consumer fiber broadband revenue growth is now expected in the mid-to-high teens, while previous outlook was in the mid-teens.

In addition, AT&T reiterated its long-term financial outlook for adjusted earnings per share accelerating to double-digit percentage growth in 2027; adjusted EBITDA growth of 3 percent or better annually from 2026-2027; and consolidated service revenue growth in the low-single-digit range annually from 2026-2027.

AT&T said it expects to realize $6.5 to $8.0 billion of cash tax savings during 2025-2027 relative to tax provisions in the One Big Beautiful Bill Act. This reflects estimated savings of $1.5 to $2.0 billion in 2025 and $2.5 to $3.0 billion in each of 2026 and 2027.

The company plans to invest $3.5 billion of these savings into its network to accelerate its fiber internet build-out to a pace of 4 million locations per year, a run-rate it expects to achieve by the end of 2026.

AT&T also intends to contribute $1.5 billion of these savings to its employee pension plan by the end of 2026.

In its second quarter, net profit came in at $4.464 billion or $0.62 per share, higher than $3.546 billion or $0.49 per share last year.

Adjusted earnings were $0.54 per share for the period, versus $0.51 a year ago. Analysts expected earnings of $0.53 per share for the quarter.

Adjusted EBITDA was $11.7 billion, versus $11.3 billion in the year-ago quarter.

The company's revenue for the period rose 3.5 percent to $30.85 billion from $29.80 billion last year. The Street was looking for revenues of $30.46 billion.

The revenue growth was due to higher Mobility and Consumer Wireline revenues, partially offset by declines in Business Wireline and Mexico

Communications segment revenues were $29.7 billion, up 3.9 percent year over year.

Mobility revenues were up 6.7 percent year over year driven by service revenue growth of 3.5 percent. Meanwhile, Business Wireline revenues were down 9.3 percent year over year due to declines in legacy and other transitional services of 17.3 percent.

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