Earnings Preview: AT&T (T) Q2 Earnings Expected to Decline

AT&T (T) is projected to report Q2 2025 earnings of $0.51 per share, reflecting a 10.5% year-over-year decline, despite an anticipated 2.5% revenue increase to $30.53 billion. The company's Zacks Earnings ESP of -2.60%, driven by a Most Accurate Estimate below consensus, combined with a Zacks Rank #3 (Hold), suggests AT&T is not a strong candidate for an earnings beat, implying potential stock pressure if results align with or miss these bearish expectations.

Analysis

AT&T is poised for a challenging Q2 2025 earnings report, with Wall Street consensus projecting a significant 10.5% year-over-year decline in earnings per share to $0.51, even as revenues are expected to grow 2.5% to $30.53 billion. This divergence between top-line growth and bottom-line contraction suggests potential margin pressures. The outlook is further clouded by a negative Zacks Earnings ESP of -2.60%, which indicates that the most recent analyst estimates are more bearish than the standing consensus, signaling deteriorating sentiment ahead of the release. While the stock holds a neutral Zacks Rank #3 (Hold), this combination of factors makes a positive earnings surprise statistically unlikely. The company's recent track record is also mixed, having beaten EPS estimates in only two of the last four quarters and posting a -1.92% miss in the most recent period. In stark contrast, competitor Verizon shows an expected EPS growth of 2.6%, a positive Earnings ESP of +0.18%, and a history of beating estimates in the last four consecutive quarters, highlighting AT&T's relative weakness within the industry.

Key Decisions for Investors

• Given the consensus for a 10.5% year-over-year earnings decline and a negative Earnings ESP of -2.60%, investors should be prepared for potential downside volatility in the stock should the company meet or miss these bearish expectations.
• Focus on management's commentary regarding profit margins during the earnings call, as the projected 2.5% revenue growth masks a significant drop in profitability that requires explanation.
• Consider the relative performance and outlook against competitor Verizon, which exhibits more favorable metrics, including expected earnings growth and a positive surprise prediction, suggesting potential for pairs trading strategies or a rotation within the sector.