New York, Jan 28, 2026, 14:26 (ET) — Regular session
- AT&T shares climbed roughly 5% in afternoon trading following its quarterly results and outlook
- The company aims to generate over $18 billion in free cash flow by 2026 and expects to deliver more than $45 billion in shareholder returns through 2028
- Investors are eyeing pending fiber and spectrum deals, along with early signs of wireless churn easing
AT&T shares climbed 4.9%, hitting $24.14 in afternoon trading Wednesday, after reaching an intraday high of $24.57. Volume surged past 52 million shares.
This response is crucial for a stock that many investors view mainly as a dividend play. In telecom, the focus isn’t on rapid growth but on whether free cash flow — the cash remaining after capital expenditures — is enough to support dividends and pay down debt.
Wednesday’s shift unfolded amid a risk-on mood in U.S. stocks, pushing the S&P 500 just past 7,000 as investors anticipated the Federal Reserve’s upcoming policy announcement. Most traders expected the Fed to keep interest rates steady. (Reuters)
AT&T reported a 3.6% rise in fourth-quarter revenue, hitting $33.5 billion. Adjusted earnings, excluding some one-time items, came in at 52 cents per share. Free cash flow totaled $4.2 billion. Looking ahead, the company expects adjusted EPS between $2.25 and $2.35 in 2026, with free cash flow of at least $18 billion. It also reaffirmed plans to return more than $45 billion to shareholders from 2026 to 2028, including a $1.11 annual dividend and about $8 billion in stock buybacks next year. “We achieved or surpassed all of our consolidated full-year guidance for 2025,” CEO John Stankey said. (AT&T Newsroom)
AT&T is banking on two major deals to boost its long-term growth: a nearly $6 billion acquisition of Lumen’s consumer fiber unit and a $23 billion purchase of EchoStar’s spectrum licenses, which carry wireless traffic. “We expect to reach over 40 million customer locations with our fiber services by the end of this year,” CEO Stankey said. The company also reported that 42% of its fiber households subscribe to its 5G mobile service. Starting in Q1, AT&T plans to reorganize its reporting, creating an “advanced connectivity” segment alongside its legacy and Latin America divisions. (Reuters)
AT&T is ramping up its fiber rollout, targeting roughly 8 million new locations in 2026 to reach a total of 40 million fiber passings, according to Broadband Breakfast. Craig Moffett, founder of MoffettNathanson, described the slowdown in fixed-wireless additions as “something of a surprise.” Meanwhile, New Street Research’s David Barden said “industry dynamics are stable.” The report notes Verizon ended Q3 with 5.3 million fixed-wireless customers, while T-Mobile had nearly 8 million.
The road ahead remains rough. The wireless market is crowded, with promotions driving churn and eating into service revenue—even when subscriber numbers stay steady.
Execution risk lingers as the two major deals remain pending and network spending stays high. Any hiccup in approvals or integration could put the cash-flow story investors are banking on to the test.
Traders are eyeing the Fed statement and Chair Jerome Powell’s remarks on Wednesday for clues on any rate shifts that could impact dividend stocks. AT&T’s next milestones include updates on wrapping up the Lumen and EchoStar deals early this year, plus whether its cash flow is on course for the $18 billion-plus target by 2026. The company announced its quarterly dividend of $0.2775 per share will be paid on Feb. 2.
