ATT 2025 Q1 Earnings Strong Performance as Net Income Rises 25%

AT&T reported a robust fiscal 2025 Q1 performance, with net income up 25.1% from the previous year, showcasing operational resilience. The company beat analyst expectations with subscriber growth and robust financial performance. Notably, AT&T's adjusted earnings per share rose by 6% year-over-year to $0.51, with revenues increasing by 2% to $30.63 billion. The positive surprise, especially compared to Verizon’s subscriber losses, drove the stock up by more than 19% year-to-date before the earnings release. Looking ahead, at&t remains optimistic, with guidance for adjusted EPS between $1.97 and $2.07 and free cash flow projected to exceed $16 billion.

Revenue

AT&T's total revenue for Q1 2025 grew by 2.0% to reach $30.63 billion, compared to $30.03 billion a year earlier. The Communications segment significantly contributed $29.56 billion, while Latin America - Mexico added $971 million. The Corporate and Other sectors accounted for $95 million, demonstrating a varied revenue stream across different segments.

Earnings/Net Income

AT&T's earnings per share (EPS) increased by 29.8% to $0.61 in Q1 2025 from $0.47 in Q1 2024, indicating strong earnings growth. The net income rose to $4.69 billion, marking a 25.1% increase from $3.75 billion in the prior year. This continued growth highlights the strength of AT&T's operations and strategic execution.

Price Action

The stock price of AT&T edged up 0.76% during the latest trading day, gained 1.26% over the most recent full trading week, but experienced a decline of 3.19% month-to-date.

Post-Earnings Price Action Review

The post-earnings impact on AT&T's stock price showed mixed results. Revenue-related news had a short-term positive impact, with a 3-Day win rate at 30%, while both the 10-Day and 30-Day win rates stood at 50%. The highest observed return following revenue earnings was 2.08% on day 50. Net income and diluted EPS had similar patterns, each with 10-Day and 30-Day win rates at 50%. The maximum return for net income was 0.61% on day 30, and for diluted EPS, it was 0.16% on day 10. Overall, the earnings-related news had a limited impact on AT&T's stock price in the short term, suggesting investors should consider these metrics when evaluating the company's financial performance and market response.

CEO Commentary

"Our business fundamentals remain strong, and we are uniquely positioned to win in this dynamic and competitive market," said John Stankey, AT&T Chairman and CEO. "We are growing the right way as customers continue to choose AT&T Fiber and 5G wireless for connectivity they can rely on, guaranteed or we'll make it right. The priorities we laid out at our 2024 Analyst & Investor Day have not changed, and we continue to operate our business to achieve the financial plan and capital returns we outlined in December."

Guidance

For the full year 2025, AT&T expects consolidated service revenue growth in the low-single-digit range, mobility service revenue growth in the higher end of the 2% to 3% range, and consumer fiber broadband revenue growth in the mid-teens. Adjusted EBITDA growth is anticipated to be 3% or better, with free cash flow projected to exceed $16 billion. Adjusted EPS is guided to be between $1.97 and $2.07.

Additional News

AT&T has announced plans to initiate share repurchases in the second quarter of 2025, following a reduction in net debt and achieving its leverage target. This strategic move is aimed at enhancing shareholder value and reflects the company's commitment to returning over $40 billion to shareholders through dividends and buybacks over the next three years. Furthermore, the company is set to finalize the sale of its entire 70% stake in DIRECTV to TPG by mid-2025. This transaction will mark a significant shift in AT&T's portfolio, allowing it to focus more intently on its core telecommunications business, particularly in the growing fiber and 5G segments.

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