AT&T Adds Wireless and Home-Internet Subscribers, Accelerates Fiber Build-Out

AT&T reported robust second-quarter results, surpassing analyst expectations with 401,000 net postpaid wireless additions and a significant increase in broadband connections, driving revenue up 3.4% to $30.8 billion and net income to $4.5 billion. The company announced plans to invest $3.5 billion of its projected $6.5-$8.0 billion in tax savings into accelerating its fiber build-out, targeting over 60 million locations by 2030. This strategic expansion, which contrasts with competitor Verizon's subscriber losses, aligns with CEO John Stankey's assessment of strong, converging industry tailwinds for infrastructure investment and regulatory changes.

Analysis

AT&T delivered a strong second-quarter performance, exceeding analyst expectations on multiple key fronts. The company reported revenue of $30.8 billion, surpassing the $30.5 billion consensus estimate, and grew net income to $4.5 billion from $3.5 billion year-over-year. Critically, postpaid wireless net additions of 401,000 significantly beat the FactSet forecast of 302,600, demonstrating successful execution even with a slight slowdown from the prior year's 419,000 additions. This subscriber growth, which stands in stark contrast to competitor Verizon's net loss of 9,000 postpaid connections, validates AT&T's strategy of bundling phone service with its expanding home-internet offerings. The broadband segment itself saw impressive acceleration, with 150,000 net additions, nearly tripling the gains from the year-ago period. Looking forward, management has provided a clear and aggressive growth trajectory, fueled by what CEO John Stankey described as unprecedented industry tailwinds. The company plans to reinvest $3.5 billion of its expected $6.5-$8.0 billion in tax savings directly into its fiber build-out, raising its 2030 target to "more than 60 million locations"—a plan bolstered by the pending acquisition of Lumen's consumer fiber assets.

Key Decisions for Investors

• The outperformance in postpaid wireless and broadband subscriber growth, especially when contrasted with Verizon's net losses, validates AT&T's strategic focus on bundling and fiber expansion, suggesting potential for continued market share gains.
• Investors should closely monitor the execution of the accelerated fiber build-out, funded by $3.5 billion in tax savings, as this represents a primary long-term value creation catalyst highlighted by management's optimistic outlook on industry tailwinds.
• Given the positive earnings surprise and strong forward guidance, investors may consider this an opportune moment to evaluate or add to positions, while keeping an eye on the successful integration of the Lumen assets and sustained momentum in subscriber metrics in coming quarters.