AT&T Inc.
T · NYSE
Next quarter
Expected to report Jan 27, 2027 — estimated from last year’s reporting date.
Consensus is $0.53 EPS for Dec 2026 across 7 estimates, ranging $0.51 to $0.55.
T Sep 2026
- 6.56%
- $0.61
- $0.65
- —
- $32.32B
Reported results
- $32.32B
- $4.09B
- 12.67%
- $891.00M
- $0.12
Highlights
- EPS: The supplied consensus comparison puts reported EPS at $0.65 versus $0.61 expected, a 6.56% beat; the 10-Q reports GAAP diluted EPS of $0.12, versus $1.29 a year ago and $0.66 in Q2.
- Revenue: Q3 revenue rose 5.3% year over year to $32.32 billion and 2.4% sequentially, led by service revenue growth and higher equipment sales.
- Advanced Connectivity: Segment revenue grew 7.2% to $29.48 billion, while operating income increased 18.9% to $7.63 billion and margin expanded 260 basis points to 25.9%.
- Mexico impairment: A $2.56 billion noncash, pretax impairment tied to the planned Mexico wireless sale contributed to $3.37 billion of Q3 impairments and restructuring costs; consolidated operating income fell 33.1% to $4.10 billion.
- Connectivity demand: AT&T added 537,000 retail wireless subscribers and 769,000 internet connections, including 442,000 fiber and 327,000 fixed-wireless net adds.
- Spectrum and debt: AT&T paid $22.65 billion for EchoStar spectrum in July. Total debt was $159.6 billion at quarter-end, up from $136.1 billion at December 2025.
- Mexico sale: AT&T agreed to sell its Mexico wireless business for about $2.0 billion in cash, subject to adjustments, plus additional contractual and contingent benefits; closing is expected in Q1 2027.
- Cash and investment: Nine-month continuing-operations cash from operations was $28.9 billion, while capital expenditures were $15.6 billion, up 11.2% year over year.
Analysis
AT&T’s Q3 combined solid growth in its core connectivity business with a sharp decline in reported GAAP earnings from unusual items and the cost of financing a major spectrum purchase. The supplied consensus comparison shows EPS of $0.65 versus $0.61 expected, but the 10-Q reports GAAP diluted EPS of $0.12. Revenue of $32.32 billion increased 5.3% from a year earlier and 2.4% from Q2; operating income of $4.10 billion was down 33.1% year over year and 41.8% sequentially, while net income attributable to AT&T fell to $891 million from $9.31 billion a year ago and $4.63 billion in Q2.
The strongest part of the print was Advanced Connectivity: revenue rose 7.2% to $29.48 billion, operating income grew 18.9% to $7.63 billion, and margin expanded to 25.9%. Wireless and broadband additions supported growth, including 442,000 fiber and 327,000 fixed-wireless internet net adds. Against that, Q3 included a $2.56 billion noncash impairment associated with the planned Mexico exit, within $3.37 billion of impairment and restructuring costs. The year-ago comparison was also elevated by a DIRECTV-related gain and a lower effective tax rate; this quarter’s effective tax rate was 51.6%. The July $22.65 billion spectrum acquisition increased debt and interest expense, making balance-sheet funding another defining feature of the quarter.
Core results and charges
Growth in service revenue and equipment sales lifted the top line, but consolidated operating profit was weighed down by impairment and restructuring charges. Net income comparisons also reflect a sizable prior-year gain and different tax rates, so the steep GAAP EPS decline is not a like-for-like measure of operating momentum.
- Revenue mix: Service revenue increased 3.8% year over year to $26.30 billion, while equipment revenue rose 12.1% to $6.02 billion.
- Operating costs: Total operating expenses increased 14.8% to $28.23 billion, including $3.37 billion of impairment and restructuring costs; operating income declined 33.1% to $4.10 billion.
- Earnings comparison: Net income attributable to AT&T was $891 million, down from $9.31 billion in Q3 2025. The prior-year quarter included $6.25 billion of other income, primarily from the DIRECTV transaction; the effective tax rate was 51.6% this quarter versus 9.2% a year ago.
- Sequential trend: Revenue increased from $31.56 billion in Q2 to $32.32 billion, while operating income fell from $7.04 billion and net income attributable to AT&T declined from $4.63 billion.
Advanced Connectivity
The domestic wireless, fiber and advanced connectivity segment was the clearest source of operating strength. Revenue growth translated into faster operating-income growth and margin expansion, with broadband additions complementing wireless service growth. Higher operating and support costs partly offset the revenue gains.
- Segment performance: Revenue rose 7.2% to $29.48 billion; operating income increased 18.9% to $7.63 billion and margin widened to 25.9% from 23.3%.
- Wireless: Wireless service revenue increased 5.0% to $17.76 billion. AT&T added 379,000 postpaid phone subscribers; postpaid phone churn was 0.92%, unchanged year over year.
- Internet: Advanced home internet revenue grew 23.4% to $2.98 billion. The company added 442,000 fiber connections and 327,000 fixed-wireless connections, bringing total internet net adds to 769,000.
- Cost and profitability: Segment operations and support expense increased 7.1% to $17.15 billion, while depreciation and amortization declined 7.4% to $4.70 billion. EBITDA margin was 41.8%, unchanged year over year.
Spectrum and funding
The spectrum purchase was the quarter’s dominant capital allocation event. AT&T acquired spectrum intended to expand 5G capacity, using debt financing that adds to interest costs; the company said interest expense is expected to remain elevated, partly offset by capitalized interest on spectrum not yet in service.
- Spectrum purchase: AT&T completed its $22.65 billion acquisition of 600 MHz and 3.45 GHz licenses from EchoStar on July 28.
- Debt: Total debt reached $159.6 billion at September 30, compared with $136.1 billion at December 31, 2025; the debt ratio was 56.1%, versus 51.4% at year-end.
- Interest expense: Q3 interest expense increased 16.4% year over year to $1.98 billion. Across the first nine months, AT&T issued $35.87 billion of long-term debt and repaid $10.17 billion.
- Capital spending: Q3 capital expenditures were $5.06 billion, up 3.6% year over year. Nine-month capital expenditures were $15.64 billion, up 11.2%.
Mexico wireless exit
AT&T agreed after quarter-end to sell its Mexico wireless business, the entirety of its Latin America segment. The planned exit drove a large noncash impairment in Q3 and moved the business to held-for-sale accounting, while its operating results remained in continuing operations for the quarter.
- Sale terms: The October 13 agreement is expected to close in Q1 2027, subject to customary conditions and regulatory approvals. AT&T expects about $2.0 billion in cash at closing, subject to adjustments, plus additional contractual and contingent benefits.
- Impairment: Held-for-sale accounting produced an approximately $2.56 billion noncash, pretax impairment charge. The quarter’s total impairment, abandonment and restructuring expense was $3.37 billion.
- Segment results: Latin America revenue increased 13.2% to $1.24 billion and operating income was $45 million versus $22 million a year earlier. Mexico wireless subscribers were 23.3 million, down 3.4% year over year.
Cash and legacy operations
Cash from continuing operations was nearly flat year over year for the first nine months, while investment outlays rose sharply with spectrum and business acquisitions. Meanwhile, the shrinking copper-based Legacy segment continued to contract, consistent with AT&T’s stated network decommissioning plans.
- Cash generation: Nine-month continuing-operations operating cash flow was $28.92 billion, compared with $28.96 billion a year earlier. Cash and cash equivalents were $10.77 billion at September 30, down from $18.23 billion at December 31, 2025.
- Investment outflow: Nine-month cash used in investing activities was $41.52 billion, including $15.64 billion of capital expenditures and acquisitions; spectrum acquisitions accounted for $23.88 billion in the supplemental acquisition data.
- Shareholder returns: AT&T repurchased about 291 million shares for $7.24 billion during the first nine months and paid $5.92 billion in dividends. The quarterly dividend declared was $0.2775 per share.
- Legacy decline: Legacy revenue fell 24.5% to $1.52 billion and operating income declined 26.7% to $498 million, as lower demand for copper-based services continued.
