AT&T lifts buyback to $10bn after Q2 subscriber beat

AT&T reported second-quarter results on Wednesday that exceeded analyst expectations, driven by broad subscriber gains across its wireless and broadband businesses. The strong execution gave management the confidence to accelerate its share repurchase programme for the year to roughly $10 billion, up from a previous target of about $8 billion.

Adjusted earnings per share reached $0.65, clearing the $0.59 consensus forecast, while EPS from continuing operations rose to $0.66 from $0.62 a year earlier. Revenue increased 2.3% year over year to $31.6 billion. The company added 432,000 net postpaid phone subscribers, well ahead of the roughly 338,500 analysts had anticipated, posting a churn rate of 0.86%.

Internet growth provided an additional lift, with 646,000 net additions spanning consumer and business accounts. That included 367,000 fibre subscribers and a record 279,000 fixed wireless additions, marking the strongest consumer postpaid wireless account growth in more than three years. AT&T noted that more than 42% of households taking its home internet also subscribe to its wireless service, a cross-selling dynamic that helps lock in customers and stabilize revenues.

The quarterly results underscore AT&T's progress in shifting its business mix toward higher-margin services. Revenue in the advanced connectivity segment, which encompasses domestic fibre and wireless operations, climbed 5.1% and drove operating income up 20.3%. Conversely, legacy services revenue dropped 26% as the company continues to wind down its ageing copper network.

"We believe our network performance and operating scale can't be matched," Chairman and CEO John Stankey said in a statement. The expanded buyback programme is underpinned by AT&T's free cash flow generation, which it still expects to reach at least $18 billion for the full year. This capacity supports a broader commitment to distribute $45 billion or more to shareholders by 2028 through a combination of dividends and repurchases.

AT&T left its full-year adjusted EPS guidance intact at $2.25 to $2.35. The company also reiterated that its fibre network now passes more than 38.6 million locations and remains on track to exceed 40 million by the end of 2026. Shares rose 1.41% on Wednesday.