AT&T Stock Falls Despite Earnings Beat, Investors Seek Perfection

AT&T stock slipped despite beating Wall Street's earnings expectations with a 54 cents per share adjusted earnings and 3.5% revenue growth to $30.8 billion. Investors may have been looking for a stronger performance following rival Verizon's beat-and-raise on Monday.

AT&T (NYSE: T) stock slipped on July 2, 2025, despite the company beating Wall Street's earnings expectations. The stock experienced a 2.2% decline to $27.23, despite posting a 54 cents per share adjusted earnings and 3.5% revenue growth to $30.8 billion. Investors may have been looking for a stronger performance following rival Verizon's (VZ) beat-and-raise on Monday.

The earnings report showed that AT&T's wireless service revenue and postpaid net adds were positive, although slower than the robust growth seen in the previous year. The company added 324,000 postpaid phone customers in Q1 2025 and grew mobility service revenue by 4.1% year over year (YoY) [2]. Free cash flow was also a critical metric, with AT&T generating $3.1 billion in the previous quarter and reaffirming full-year guidance of $16 billion [2].

However, investors were likely hoping for more significant improvements, given Verizon's strong Q2 results. Verizon's Q2 revenue hit $34.5 billion, up 5.2% year-over-year, and its adjusted EPS of $1.22 rose 6.1%. Verizon also raised its 2025 free cash flow and profit forecasts, citing strong demand for premium wireless plans and broadband bundles [3].

Analysts had expected AT&T to report Q2 2025 revenue of approximately $31.2 billion, with net income reaching around $4.85 billion and EPS projected at $0.63. Several major banks have upgraded AT&T's stock, citing strategic divestitures and increased 5G adoption as key growth drivers. Price targets have been adjusted upwards, with a consensus around $22 per share [4].

Despite the disappointment, AT&T's financial health remains robust. The company's wireless business contributes nearly 70% of its revenue, making it a key driver of the company's performance. AT&T is the third-largest US wireless carrier, connecting 73 million postpaid and 17 million prepaid phone customers [3].

Investors will continue to watch AT&T's earnings closely for signs of continued growth and operational efficiency. The company's focus on strategic initiatives, such as 5G expansion and divestitures, positions it well for future success. However, competitive pressures in the telecommunications market could impact profitability margins. The outlook is cautiously bullish, given the company's robust financial health and strategic focus [4].

References:
[1] https://www.nasdaq.com/articles/insights-atts-upcoming-earnings
[2] https://www.ainvest.com/news/q2-2025-earnings-preview-analyst-estimates-performance-market-sentiments-2507/
[3] https://www.tipranks.com/news/att-stock-t-gains-as-verizons-strong-q2-fuels-telecom-rally
[4] https://www.ainvest.com/news/att-q2-2025-earnings-preview-upside-potential-strategic-divestitures-5g-expansion-2507/