AT&T shares sank about 6% on Wednesday — making it the worst performer in the S&P 500 — despite the telecom giant reporting better-than-expected third-quarter results and raising its full-year profit outlook. The company posted revenue of $32.3 billion, up 5.3% year over year and above the $31.69 billion consensus, while adjusted earnings of 65 cents per share beat the 60-cent estimate by more than 8%.
Investors focused instead on wireless subscriber growth and the looming threat of competition from SpaceX’s Starlink Mobile service. AT&T added 379,000 postpaid phone subscribers, below analyst estimates near 387,000, and the postpaid phone churn rate held at 0.92%. The selloff dragged Verizon down 2.48% and T-Mobile about 3%.
Broadband shines, wireless disappoints
The standout was broadband: AT&T added a record 769,000 internet subscribers, including 442,000 fiber and 327,000 fixed wireless net adds, pushing fiber locations past 39 million. Advanced Connectivity service revenue rose 6.1% to $23.9 billion, with nearly 43% of advanced internet households also on AT&T wireless plans.
But investors questioned the economics of promotional broadband pricing, and SpaceX’s purchase of 800 MHz of spectrum has raised fears that Starlink Mobile could become a direct-to-cell competitor.
Raised outlook, bigger buybacks
AT&T raised its 2026 adjusted EPS guidance to approximately $2.40, above both its prior $2.25–$2.35 range and the $2.35 consensus, reiterated at least $18 billion in full-year free cash flow, and accelerated share repurchases to about $10 billion. CEO John Stankey said the quarter showed the company’s “structural advantages to lead the next era of connectivity.”
The rare post-earnings drop — the stock has risen after nine of its last ten reports — capped a volatile earnings day for telecom and tech.
The quarter’s fine print showed both strength and strain. Free cash flow held steady at about $5 billion, but net debt to adjusted EBITDA rose to 3.13x from 2.68x in the second quarter, and the company booked a $2.6 billion noncash impairment tied to the planned sale of AT&T Mexico plus an $800 million employee-separation charge. Management’s answer: keep building — more than 60 million fiber locations by the end of the decade — while returning cash through a $1.11 annualised dividend yielding around 4.7%.
