Benzinga Pro data showed AT&T shares down 5.87% at $22.04 on Wednesday at publication time, despite better-than-expected third-quarter 2026 earnings and revenue. AT&T reported adjusted earnings of 65 cents per share, above the analyst consensus of 60 cents. AT&T's revenue grew 5.3% from a year earlier to $32.3 billion, exceeding the $31.7 billion estimate.
AT&T added 379,000 postpaid phone subscribers during the quarter, below expectations of 387,410 and the year-earlier total of 405,000. Bloomberg reported Wednesday that subscriber additions missed expectations despite promotions and iPhone 18 Pro subsidies intended to retain customers. AT&T's postpaid phone churn rate, the proportion of customers leaving the service, was 0.92%. AT&T added 769,000 high-speed internet customers, comprising 442,000 fiber subscribers and 327,000 fixed wireless customers. AT&T's combined internet and wireless customer additions exceeded 1 million for a second consecutive quarter. About 42.8% of households with AT&T's advanced home internet service also used AT&T wireless plans, reflecting increased adoption of bundled services.
AT&T's largest business, Advanced Connectivity, recorded revenue growth of 7.2%, driven by service revenue growth of 6.1%. AT&T's Legacy revenue fell 24.5% as AT&T phased out its copper network. AT&T's Latin America revenue increased 13.2%, supported by favorable currency movements and growth in postpaid wireless subscribers.
AT&T's adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose to $12.5 billion from $11.9 billion a year earlier. However, AT&T's net income dropped to $891 million from $9.31 billion. The net income decline reflected a $2.6 billion noncash impairment charge for AT&T's Mexico wireless business, held for sale, and employee separation costs. AT&T's operating cash flow increased to $10.5 billion from $10.2 billion. AT&T's free cash flow rose to $5 billion from $4.9 billion. AT&T spent $5.1 billion on capital expenditures during the quarter.
AT&T continues to depend on wireless, fiber and bundled services to generate growth. Intense competition in the U.S. wireless market and Starlink Mobile's potential entry could increase customer acquisition costs and pressure profit margins. Space Exploration Technologies Corp., known as SpaceX, is preparing to expand satellite-to-mobile services through Starlink Mobile. Bloomberg Intelligence analyst John Butler warned that Starlink Mobile could reduce AT&T's margins by requiring greater spending to attract and retain wireless customers. However, TD Cowen analysts believe AT&T's combined fiber and wireless offering could provide an advantage over emerging satellite-based mobile services.
AT&T increased its 2026 adjusted earnings forecast to $2.40 per share from a range of $2.25 to $2.35. AT&T's revised forecast exceeds the analyst consensus of $2.34 per share. AT&T raised its annual Advanced Connectivity service revenue growth outlook through 2028 to a mid-single-digit rate from a low-single-digit rate. AT&T retained its adjusted EBITDA growth forecast of 3% to 4% in 2026, accelerating to at least 5% by 2028. AT&T maintained its forecast for double-digit compound annual growth in adjusted earnings per share through 2028. Advanced Connectivity EBITDA is expected to increase at a mid-to-high single-digit annual rate, including growth above 6% in 2026. AT&T expects Legacy service revenue to fall more than 20% this year. AT&T's Legacy business should become immaterial by the end of 2029.
AT&T is expanding its fiber network to strengthen its broadband market position. AT&T's fiber network currently covers 39.7 million consumer and business locations. AT&T expects fiber coverage to surpass 40 million locations by the end of 2026 and exceed 60 million by 2030. AT&T reiterated annual capital expenditure plans of $23 billion to $24 billion between 2026 and 2028. AT&T maintained free cash flow forecasts of at least $18 billion in 2026, $19 billion in 2027 and $21 billion in 2028.
AT&T reaffirmed plans to return more than $45 billion to shareholders through dividends and stock repurchases between 2026 and 2028. AT&T kept its annualized dividend at $1.11 per share. AT&T reiterated plans for approximately $24 billion in stock repurchases over the three-year period, including about $10 billion in 2026.
AT&T Stock Falls 5.87% Despite Strong Q3 Earnings and Revenue
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Summary
AT&T (NYSE:T) shares dropped 5.87% to $22.04 on Wednesday, despite beating Q3 2026 earnings and revenue estimates. The fear and greed index shows mixed sentiment as investors react to weak postpaid phone subscriber growth. With market attention shifting, altcoins to watch may gain traction as traders seek alternative opportunities. The company reported adjusted earnings of 65 cents per share and revenue of $32.3 billion.
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