AT&T shares T fell sharply on Wednesday despite the telecommunications company reporting better-than-expected third-quarter earnings, raising its 2026 profit outlook and accelerating planned share repurchases.
Investors focused on wireless subscriber growth and potential competition from SpaceX’s Starlink Mobile service.
AT&T stock declined 6.23% to $21.96, making it the worst-performing stock in the S&P 500 during the session.
Verizon Communications shares fell 2.48%, while T-Mobile dropped 3%.
The sell-off came despite AT&T reporting revenue of $32.3 billion, up 5.3% year over year and above FactSet analysts’ consensus estimate of $31.69 billion.
Adjusted earnings reached 65 cents per share, beating forecasts of 60 cents.
AT&T raises profit outlook and accelerates buybacks
AT&T raised its adjusted earnings outlook for 2026 to around $2.40 per share, above the $2.25 to $2.35 range provided in July.
The company also confirmed its annualised dividend of $1.11 per share.
Based on Tuesday’s closing price, the dividend yield stood at 4.7%, compared with the S&P 500’s 1.07% yield in the second quarter.
Chief executive John Stankey said the company would accelerate planned share repurchases to approximately $10 billion this year, citing confidence in its competitive position.
“The accelerated growth we delivered this quarter shows our structural advantages to lead the next era of connectivity,” Stankey said in a statement.
However, the strong financial results failed to prevent a steep decline in the stock as investors weighed the company’s subscriber figures and the prospect of increased competition in wireless services.
AT&T added 379,000 postpaid phone subscribers in the third quarter, compared with 432,000 in the previous quarter.
Postpaid customers, who pay monthly, are important to telecom operators because they provide recurring revenue.
SpaceX’s Starlink mobile raises competition concerns
SpaceX’s plans to expand into mobile services have added to concerns about the competitive landscape for established telecommunications companies. The company plans to turn Starlink into a major US mobile carrier and is acquiring low-band spectrum to support the effort.
SpaceX’s chief operating officer said Starlink Mobile had surpassed 22 million monthly users, a 37% increase from the previous quarter.
Stankey urged investors not to overstate the competitive threat from the satellite operator’s spectrum holdings.
“I wouldn’t over-rotate on what I would call one carrier of low-band spectrum,” the AT&T CEO told analysts on Wednesday.
He said AT&T typically operates between six and eight carriers of low-band spectrum in a metropolitan area.
He also argued that wireless performance depends on infrastructure beyond spectrum, including the ability to deliver reliable service inside buildings, stadiums and hospitals.
In Chicago, Stankey said, 40% to 45% of mobile traffic originates indoors.
Building a network capable of providing comparable coverage requires substantial investment and time, he added.
AT&T highlights fiber network and satellite opportunities
Stankey acknowledged that low-Earth-orbit satellites could help telecommunications companies serve rural areas more economically and reduce customer losses in the less densely populated parts of their networks.
He also highlighted AT&T’s fiber infrastructure as a key competitive advantage, arguing that fiber-based broadband combined with wireless service offers a durable customer proposition.
“Our fiber reach has never been greater. Our spectrum position has never been stronger,” Stankey said.
AT&T reported a record quarter for internet net additions across fiber and fixed wireless.
The company said more than 90% of mapped US data centres are within 10 miles of its fiber network.
AT&T also connects Amazon Web Services sites and is working with Microsoft on high-capacity connectivity requirements.
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