AT&T Stock Slides as Postpaid Phone Pressure Weighs on Growing Subscriber Base

AT&T’s (T) shares fell about 3% early Wednesday even after the telecom giant released earnings that surpassed Wall Street’s estimates.

The company’s push to get customers to bundle its fiber and wireless services paid off, delivering AT&T its “best first quarter ever” for new Advanced Connectivity internet subscribers. However, the telco firm reported fewer new customers for its lucrative postpaid phone business compared to the year-ago period.

AT&T Marks Q1 Beat

During the quarter, AT&T reported 57 cents in adjusted earnings per share, up 12% year-over-year and ahead of the Wall Street consensus of 55 cents per share. The telco’s revenue also rose by 2.9% from the year-ago quarter to reach $31.5 billion.

While an increase in subscribers and equipment sales pushed operating revenue from the Latin America segment 20.8% higher year-over-year to $1.17 billion, the Advanced Connectivity segment remains the biggest source of revenue.

AT&T Revenue Breakdown

This unit saw its operating revenues rise by 4.7% from a year ago to roughly $28.5 billion. Service revenue — or earnings from AT&T’s core growth areas of 5G wireless services and Fiber offerings from this segment — climbed by 3.6% year-over-year to $22.9 billion.

New consumer subscribers to the telco’s advanced home internet offerings — minus those that left — led the way in the quarter in terms of net additions to AT&T’s advanced connectivity internet service. They accounted for 512,000 subscribers of the overall 584,000 consumer and business net additions seen in the quarter.

The overall net additions comprised 292,000 fiber and 292,000 fixed wireless subscribers.

However, AT&T only saw net additions of 294,000 postpaid phone subscribers during the quarter. This compares less favorably to 324,000 postpaid phone net additions in the same quarter a year ago.

In addition, during Q1 2026, the postpaid phone churn — or the number of customers on monthly billing plans who cancelled their subscriptions or switched to another carrier — came in at 0.89%, compared to 0.83% in Q1 2025.

Moreover, the telco’s postpaid phone net additions during the final quarter of 2025 stood at 421,000.

AT&T Issues Guidance for 2026

Looking ahead, AT&T sees:

• Service revenue growing by a low-single-digit range
• Adjusted EPS of between $2.25 and $2.35. At the midpoint, this matches the Wall Street consensus of $2.30

Is AT&T a Buy, Sell, or Hold?

On Wall Street, AT&T’s shares remain a Moderate Buy based on analysts’ consensus rating. This breaks down into 13 Buys and six Holds issued by analysts over the past three months.

However, the average T price target of $30.65 implies more than 18% upside. Yet, it is important to note that analysts’ ratings may change following the latest earnings results.