AT&T Beats on Q3 Profit and Lifts Its 2026 Forecast, but Shares Fall on a Bigger Debt Load

AT&T reported its best consolidated service-revenue growth in more than four years on Wednesday, beat Wall Street’s profit estimate, and raised its outlook for the year. Shares fell anyway, down about 5% in afternoon trading and changing hands near $22, from Tuesday’s close of $23.42. The report gave investors plenty to like. It also handed them a bigger debt number to weigh.

A record quarter for internet adds

Revenue rose 5.3% from a year earlier to $32.3 billion, ahead of the $31.69 billion analysts expected. Adjusted earnings came to $0.65 a share, up from $0.54 and above the $0.60 consensus. The growth came from customers signing up. AT&T added a record 769,000 internet subscribers in the quarter, split between 442,000 on fiber and 327,000 on fixed wireless, alongside 379,000 postpaid phone subscribers. Free cash flow reached $5.0 billion, up from $4.9 billion a year earlier. On the strength of that, management lifted its full-year adjusted earnings target to the $2.40 range, from a prior forecast of $2.25 to $2.35 a share.

The spectrum bill shows up as debt

The concern sat lower on the statement. Net debt climbed to $149.8 billion from $126.4 billion at the end of June, driven mainly by AT&T’s purchase of wireless spectrum licenses from EchoStar. That pushed net debt to 3.13 times adjusted EBITDA, a common gauge of operating cash flow, up from 2.68 times a quarter earlier. The company now expects to reach its leverage goal of about 2.5 times in 2029, later than it had planned. Spending stays heavy too. AT&T guided to capital investment of $23 billion to $24 billion this year, easing to $22 billion to $23 billion in both 2027 and 2028.

A Mexico write-down on the bottom line

The reported number looked worse. On a GAAP basis, diluted earnings from continuing operations fell to $0.13 a share from $1.29. Most of that gap came from a $2.6 billion non-cash impairment tied to AT&T’s wireless business in Mexico, which the company agreed on October 13 to sell, plus charges for employee separations. The year-ago quarter had been boosted by a gain on the sale of its DIRECTV stake. AT&T said the impairment sits in its corporate accounts and does not touch the operating segments.

Below where it traded a month ago

Wednesday’s slide extended a weak stretch. AT&T closed Tuesday at $23.42, already down 8% from a month earlier, when it traded above $25. Over three months the stock is little changed. It now sits 21% below its 52-week high of $29.79 and 18% above its 52-week low of $19.89. The company carries a market value around $150 billion.

On the calendar: the close and Verizon

Two readings will fill in the picture. The closing bell will show how much of the day’s decline holds. And rival Verizon reports its own third-quarter results on October 26, a check on whether AT&T’s subscriber gains reflect its execution or a healthier market for phone and internet plans across the industry. AT&T held its earnings call Wednesday morning.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.