AT&T third-quarter adjusted EPS rises to $0.65 as fiber net adds climb

AT&T Inc. (T) said Wednesday that third-quarter adjusted earnings per share rose to $0.65 from $0.54 a year earlier, while diluted earnings per share from continuing operations fell to $0.13. The company said in a filing that the reported figure included a non-cash impairment charge tied to its held-for-sale Mexico wireless business.

Revenue totaled $32.3 billion, up 5.3% from $30.7 billion a year earlier. The company said growth came largely from Advanced Connectivity wireless service and equipment revenues and fiber revenues, including the first-quarter acquisition of Lumen’s mass markets fiber business.

Here’s how the company did:

• Diluted EPS from continuing operations: $0.13 vs. $1.29 a year earlier
• Adjusted EPS: $0.65 vs. $0.54 a year earlier
• Revenue: $32.3 billion vs. $30.7 billion a year earlier
• Operating income: $4.1 billion vs. $6.1 billion a year earlier
• Adjusted EBITDA: $12.5 billion vs. $11.9 billion a year earlier
• Free cash flow: $5.0 billion vs. $4.9 billion a year earlier

Operating income fell to $4.1 billion from $6.1 billion, as operating expenses rose to $28.2 billion from $24.6 billion. The company said the increase was primarily due to the $2.6 billion impairment, employee separation charges and higher wireless equipment costs.

Adjusted operating income was $7.6 billion, versus $6.6 billion a year earlier. Adjusted EBITDA rose 5.4% to $12.5 billion.

Cash from operating activities from continuing operations was $10.5 billion, versus $10.2 billion a year earlier. The company said the prior-year period included voluntary pension plan contributions, and that the increase also reflects timing of working capital payments.

Capital expenditures related to continuing operations were $5.1 billion. Capital investment, which adds cash payments for vendor financing, totaled $5.6 billion.

Segment results

Advanced Connectivity service revenue grew 6.1% to $23.9 billion. Segment operating income rose 18.9% to $7.6 billion, and segment EBITDA rose 7.3% to $12.3 billion.

The company said it added 769,000 Advanced Connectivity internet customers, a record quarter, including 442,000 fiber and 327,000 fixed wireless. It said this was the second consecutive quarter with more than 1 million Advanced Connectivity customer additions.

The filing also showed 379,000 postpaid phone net adds, with postpaid phone churn of 0.92%.

Legacy segment revenue fell 24.5% to $1.5 billion from $2.0 billion, as the company continues to decommission its copper-based network.

Latin America segment revenue rose 13.2% to $1.2 billion, and EBITDA rose 18.6% to $236 million.

The company had 127,150 total employees at the end of the quarter, compared with 135,670 a year earlier.

Mexico sale and impairment

On Oct. 13, AT&T entered into an agreement to sell its Mexico wireless business, which is the entirety of the Latin America segment. The company applied held-for-sale accounting as of Sept. 30.

AT&T recorded a non-cash impairment charge of $2.6 billion at Corporate and Other. The company said the charge did not affect third-quarter segment results.

Outlook and capital returns

AT&T said it is increasing its outlook for 2026 adjusted EPS, now in the $2.40 range. It is also lowering its long-term capital investment outlook to $23 billion to $24 billion in 2026 and $22 billion to $23 billion annually in 2027 and 2028.

AT&T Chairman and CEO John Stankey said: “We are growing valuable customer relationships as more homes and businesses choose AT&T for all their advanced connectivity needs across both internet and on-the-go wireless.”

Stankey added: “Our asset base positions us well for the AI era, with a leading position in fiber – the best technology available.”

The company expects adjusted EBITDA growth in the upper portion of the 3% to 4% range in 2026, improving to 5% or better in 2028. It expects Advanced Connectivity EBITDA growth of 6% or more in 2026.

The company expects free cash flow of $18 billion or more in 2026, $19 billion or more in 2027 and $21 billion or more in 2028.

AT&T returned about $4.8 billion to shareholders in the quarter, including $2.8 billion in common share repurchases. It plans to return $45 billion or more during 2026 through 2028 through dividends and share repurchases, and it plans to maintain its current annualized common stock dividend of $1.11 per share.

Total debt was $159.6 billion at the end of the quarter and net debt was $149.8 billion, both reflecting a sequential increase related to the closing of the EchoStar spectrum transaction. The company expects its net debt-to-adjusted EBITDA ratio to return to its target in the 2.5x range during 2029.

The company said it has agreed to sell a controlling interest in Forged Fiber 37, the unit that holds fiber network assets from the Lumen Mass Markets acquisition, which closed Feb. 2, 2026.