AT&T Inc. provides telecommunications and technology services worldwide.
AT&T has delivered a solid set of first-quarter results, demonstrating resilience and effective strategy execution despite a challenging start to the year. The telecommunications giant, which forms part of the momentum component in the US Growth portfolio due to its relative share price strength, saw its shares rise by 0.85% following the release.
The company added 324,000 postpaid phone customers during the quarter, comfortably beating expectations. This outcome reflects AT&T’s proactive competitive response, using attractive offers to offset the heightened promotional activity seen earlier in the year. Mobility service revenue also outperformed, coming in at USD 16.7 billion, ahead of the USD 16.5 billion forecast. These results highlight the strength of AT&T’s converged fibre and 5G strategy and the benefits of its expanded network capacity.
Total revenue for the quarter rose 2% year-on-year to USD 30.6 billion, broadly meeting market expectations. Adjusted earnings per share landed at 51 cents, slightly under consensus but up from the prior year’s 48 cents. Free cash flow was a bright spot, increasing 11% year-on-year to USD 3.1 billion, although this fell short of the USD 4.4 billion forecast for the second quarter, partly due to the commencement of a USD 20 billion share buyback program.
A key focus for AT&T remains its commitment to narrowing its business around wireless and fibre broadband services. The company’s strategic divestment of DirecTV has helped sharpen this focus. Looking ahead, AT&T continues to guide for low single-digit consolidated service revenue growth and expects mobility service revenue to grow towards the higher end of the 2% to 3% range. Its fibre broadband arm is also forecast to maintain strong momentum, with mid-teens revenue growth anticipated.
One challenge on the horizon is the potential impact of handset price increases, largely driven by tariff-related pressures. AT&T has indicated that these costs will likely be passed on to consumers, although some restructuring of mobile plans may help soften the blow. This approach aligns with broader industry dynamics, as peers like Verizon and T-Mobile respond similarly to the tariff environment.
Despite some headwinds, including softer free cash flow guidance relative to consensus, the overall tone from AT&T remains confident. The company reaffirmed its full-year free cash flow target of at least USD 16 billion and continues to invest in network capacity and fibre expansion. With stable wireless performance and a clear strategic focus, AT&T appears well-positioned to navigate competitive pressures and maintain momentum through 2025.
