By AT&T Inc. shares fell on Wednesday after the telecom giant’s profit forecast for 2025 came in below analysts’ expectations, raising concerns about growth momentum despite strong second-quarter results and expanding strategic initiatives.
The company now expects adjusted earnings per share (EPS) of $1.97 to $2.07 in 2025, falling short of the Wall Street consensus of $2.09.
Following the announcement, AT&T shares dropped 5% however the stock recovered and was traded down only 0.16% at the time of writing.
Despite the dip, the stock remains up 20% year-to-date.
Strong Q2 results amid slower fiber growth
For the second quarter ended June 30, 2025, AT&T reported adjusted EPS of $0.54, an increase from $0.51 in the same period last year.
Diluted EPS rose to $0.62 from $0.49, and revenue grew 3.4% to $30.8 billion.
Free cash flow came in at $4.4 billion, underscoring the company’s stable financial foundation.
AT&T saw strong performance in its wireless segment, adding 401,000 net postpaid phone subscribers in the quarter, fueled by discounted bundle offerings.
However, the company added fewer fiber customers than expected, with 243,000 additions, down from 261,000 in the previous quarter.
While fiber revenues increased by 18.9% year-over-year, the slowdown in new fiber subscribers raised concerns about intensifying market competition.
The company also reported a postpaid phone churn rate of 0.87% and mobility service revenue growth of 3.5%, reaching $16.9 billion in Q2.
Fiber expansion and strategic moves
AT&T is accelerating its fiber optic network buildout across the US, leveraging tax savings from President Donald Trump’s tax and spending bill to support infrastructure investments.
The company estimates it will gain $6.5 billion to $8 billion in cash tax savings through 2027 as a result of the legislation.
Of that, AT&T plans to invest $3.5 billion into expanding its fiber internet coverage to 4 million new locations per year by the end of 2026.
The company also aims to reach 50 million customer locations by 2030.
To support this expansion, AT&T is in the process of acquiring Lumen Technologies Inc.’s consumer fiber business, further enhancing its wired service footprint.
Other strategic moves in the quarter included the sale of its remaining 70% stake in DIRECTV to TPG and $1 billion in stock buybacks, reflecting a continued focus on streamlining operations and returning value to shareholders.
Revised outlook and management commentary
In its updated guidance for 2025, AT&T projects consolidated service revenue growth in the low-single digits, mobility service revenue growth of 3% or higher, and consumer fiber broadband revenue growth in the mid-to-high teens.
The company expects free cash flow in the low-to-mid $16 billion range, supported by operational efficiencies and ongoing investment in high-growth areas.
Chairman and CEO John Stankey pointed to the company’s leadership in wireless and fiber networks, highlighting recent milestones including surpassing 30 million fiber customer locations and reaching over 1 million AT&T Internet Air customers.
He reinforced the company’s commitment to long-term growth, noting continued progress in expanding its subscriber base and digital infrastructure.
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