AT&T Earnings Show Mixed Signals Amid Market Rally

AT&T's latest earnings reveal a mixed performance despite a strong market. While revenue grew by 2%, net income surged 25%, missing EPS estimates. Investors remain cautious due to macroeconomic challenges and lack of clarity on strategic responses.

Date: 24-04-2025

AI Rating: 5

AT&T's recent earnings report offers a mixed picture for professional investors. The company reported revenue growth of 2%, totaling $30.6 billion. While this increase is commendable and attributed to strong performance in mobility and consumer wireline segments, concerns arise from declines in business wireline and Mexican operations, compounded by foreign exchange impacts.

On the profit side, AT&T delivered a net income of approximately $4.7 billion, marking a robust increase of 25%. The earnings per share (EPS) was recorded at $0.51 on a non-GAAP basis, an impressive improvement from $0.47 year-over-year. However, it narrowly missed analyst expectations of $0.52 per share. This slight underperformance could lead to short-term investor disappointment.

The guidance provided by AT&T for the upcoming year indicates a cautious outlook, with expectations for consolidated service revenue to increase by only a low single-digit percentage. Furthermore, the projected adjusted EPS range of $1.97 to $2.07 falls short of the consensus estimate of $2.09, suggesting potential stagnation in earnings growth.

Moreover, CEO John Stankey acknowledged the impact of current U.S. tariffs on costs, which raises questions regarding AT&T's ability to navigate macroeconomic challenges effectively. The lack of a strategic roadmap to tackle these issues could dampen investor sentiment and affect stock performance in the near term.

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