AT&T Inc. (NYSE: T) saw its stock climb 3.5% to $23.04 on Wednesday, extending a five-session winning streak that lifted shares 7.5%. The rally came after the telecommunications giant reported better-than-expected subscriber additions and reaffirmed its robust free cash flow outlook, underpinning an accelerated share repurchase program.
The company added 432,000 postpaid phone subscribers in the second quarter, surpassing consensus estimates by nearly 28%. This key metric, closely watched by investors, signals strong demand for AT&T's wireless services and successful customer retention strategies.
AT&T's board has authorized approximately $10 billion in share buybacks for 2026, up from previous plans. In the first half of the year, the company repurchased 174 million shares at an average price of $25.49, totaling $4.435 billion. Wednesday's closing price of $23.04 sits 9.6% below that average, creating a sizable discount that management aims to exploit.
Chief Executive John Stankey said, “We are accelerating the pace of our planned share repurchases this year to approximately $10 billion,” citing confidence in the company's market strength. The buyback program is a central pillar of AT&T's capital-return strategy, alongside a $1.11 annualized dividend.
Free cash flow for the quarter came in at $4.70 billion, above the consensus estimate of $4.43 billion. The company reaffirmed its full-year forecast of at least $18 billion in free cash flow and capital expenditures in the $23 billion to $24 billion range. Based on 6.852 billion shares outstanding as of July 16, the dividend would consume about $7.6 billion, bringing total projected capital returns to nearly $17.6 billion. That represents roughly 11.2% of the implied equity value and almost 98% of the minimum free-cash-flow goal.
Adjusted earnings per share of $0.65 exceeded the $0.59 consensus by 10.2%, while revenue of $31.56 billion fell slightly short of the $31.80 billion estimate. Revenue was the only metric to miss expectations, as the company's business mix shifted toward higher-growth areas. Advanced Connectivity service revenue rose 5.1%, operating income in that segment jumped 20.3%, and the operating margin expanded by 350 basis points. Meanwhile, legacy revenue declined 25.9%.
On the broadband front, AT&T added 367,000 net fiber customers and 279,000 new fixed-wireless connections. The company noted that approximately 42.5% of homes using advanced internet services also subscribe to AT&T wireless, a convergence metric that could still be revised upward. “The cross-selling they have been working on is now evident in the numbers,” said David Wagner, head of equity at Aptus Capital Advisors, pointing to market share gains.
Despite the positive results, the stock still trades below the average buyback price, leaving room for further repurchases. Based on preliminary figures, about $5.6 billion remains after first-half buybacks, which could repurchase around 242 million shares at $23.04 each, representing 3.5% of outstanding shares.
Investors will closely watch upcoming earnings from rivals T-Mobile US (NASDAQ: TMUS) on Thursday and Verizon Communications (NYSE: VZ) on Friday to gauge whether AT&T's subscriber growth was company-specific or industry-wide. Risks remain, including $126.4 billion in net debt, a 13.8% rise in quarterly interest expenses, and potential regulatory delays in phasing out legacy copper-network costs.
