Big Three Telecom Stocks Post Solid Q2 Results, But AT&T and Verizon Face Challenges.

The Big Three telecom stocks, AT&T, Verizon Communications, and T-Mobile US, reported Q2 financials. AT&T beat sales estimates by $400mln and surpassed adjusted EPS forecasts, adding 401,000 net postpaid cell phone subscribers and increasing fiber revenues by 19%. Verizon posted solid results, beating expectations on revenue and adjusted EPS, but its net postpaid cell phone customers fell by 9,000. T-Mobile US reported a 3% decline in revenue and a loss of 55,000 postpaid customers, but its prepaid customer base grew by 9%.

The Big Three telecom stocks—AT&T (NYSE: T), Verizon Communications (NYSE: VZ), and T-Mobile US (NASDAQ: TMUS)—reported their Q2 financials, offering investors a glimpse into the industry's performance. Here's a breakdown of each company's performance.

AT&T

AT&T reported solid Q2 financials, beating sales estimates by more than $400 million and surpassing adjusted earnings per share (EPS) forecasts by 1 cent. The company added 401,000 net postpaid cell phone subscribers, despite a 4% drop compared to the same period last year. AT&T's broadband business also performed well, with fiber optic and AT&T Internet Air customers increasing by 243,000 and 203,000, respectively. The company's "converged customers" percentage, which measures the percentage of fiber and cell phone customers, increased to just under 41%. AT&T also expects to see $6.5 billion to $8 billion in cash tax savings through 2027 due to the One Big, Beautiful Bill (OBBB) [1].

Verizon Communications

Verizon posted strong results, beating expectations on both revenue and adjusted EPS. The company also increased its full-year guidance on key metrics, including adjusted EPS growth and free cash flow. However, Verizon's net postpaid cell phone customers fell by 9,000, while Wall Street expected an increase. The company added 42,000 business phone customers but lost 51,000 consumer customers. Verizon's broadband business added 293,000 net customers, down from 391,000 a year ago. The company expects tax reforms in the OBBB to benefit free cash flow by $1.5 billion to $2 billion in 2025 [1].

T-Mobile US

T-Mobile US reported a 3% decline in revenue but a 14% increase in adjusted EPS to $2.84, beating Wall Street's expectations. The company added 830,000 net postpaid cell phone customers, a record Q2 figure for T-Mobile. T-Mobile also added 1.7 million total net postpaid adds, including net postpaid cell phone adds, net 5G broadband adds, and net postpaid wireless adds for other devices. The company expects to add around 500,000 more net postpaid customers when combining wireless and broadband, versus previous forecasts. T-Mobile's prepaid customer base grew by 9%, and the company expects $1.5 billion in OBBB-related cash tax benefits in 2026 [1].

Conclusion

All three companies performed solidly in Q2, with T-Mobile US standing out as the clear winner. T-Mobile's record-breaking subscriber additions and impressive EPS growth were particularly noteworthy. However, Verizon's loss of postpaid wireless customers and AT&T's slight decline in subscriber additions are areas of concern. Investors should keep an eye on these trends as the companies continue to compete for market share.

References

[1] https://www.marketbeat.com/stock-ideas/big-3-telecom-wars-2-solid-showings-1-huge-winner-in-q2/