Earning Preview: AT&T Inc Q1 Revenue Is Expected To Increase By 2.87%, And Institutional Views Are Mostly Buy
Earnings Agent04-19 08:00
Abstract
AT&T Inc will report first-quarter 2026 results on April 22, 2026, Pre-Market; this preview summarizes consensus expectations for revenue, margins, EPS, and key segment drivers alongside the prevailing institutional stance.
Market Forecast
Consensus compiled from the finance dataset points to first-quarter 2026 revenue of 31.22 billion US dollars, up 2.87% year over year; EBIT is projected at 6.73 billion US dollars with year-over-year growth of 9.18%; and EPS is estimated at 0.55, implying 12.94% growth. The company’s gross profit margin last quarter was 55.72%, and net profit margin was 11.32%; while margin guidance isn’t explicitly provided for this quarter in the forecast, the modeled mix and cost trajectory imply modest year-over-year margin expansion consistent with EBIT growth outpacing revenue. Net profit growth implied by consensus is underpinned by continued wireless and fiber momentum and lower legacy mix headwinds.
AT&T Inc’s main business remains “Communications,” which generated 32.12 billion US dollars last quarter; management signals continued growth in Mobility service and Consumer Wireline fiber, with Business Wireline legacy decline still a drag but easing on cost actions. The most promising segment remains fiber broadband within Consumer Wireline, after fourth-quarter fiber revenue rose 13.6% year over year to 2.20 billion US dollars on sustained net adds and improving ARPU.
Last Quarter Review
In the fourth quarter of 2025, AT&T Inc delivered revenue of 33.47 billion US dollars, GAAP net income attributable to common of 3.80 billion US dollars, a gross profit margin of 55.72%, a net profit margin of 11.32%, and adjusted EPS of 0.52, up 20.9% year over year. GAAP net profit attributable to the parent company for the quarter was approximately 3.79 billion US dollars, with quarter-on-quarter net profit change of -59.33% given the unusually high gain in the prior quarter from the DIRECTV sale.
A notable highlight was strong operating leverage in Communications, where operating income rose 9.5% year over year on 3.2% revenue growth, supported by Mobility equipment sell-through and service revenue growth. Main business momentum was led by Mobility service revenue up 2.4% year over year to 16.95 billion US dollars and Consumer Wireline fiber revenue up 13.6% to 2.20 billion US dollars, offsetting ongoing Business Wireline legacy revenue decline of 7.5%.
Current Quarter Outlook (with major analytical insights)
Main business: Mobility and core Communications
Momentum into the first quarter is anchored by Mobility service revenue expansion and continued low churn in postpaid phones, supported by converged offers that bundle wireless and home internet. The modeled revenue growth of 2.87% reflects healthy service trends with a smaller contribution from equipment, given normal seasonal deceleration from the holiday quarter. EBIT growth outpacing revenue suggests cost discipline and improved mix, including ongoing network transformation benefits and lower depreciation on fully depreciated legacy assets offset by fiber build depreciation.
Promotions remain a watch item across U.S. wireless, but recent quarterly data showed ARPU stability and churn under control, supported by converged accounts where fiber customers also take Mobility. Management’s strategy to emphasize convergence and customer tenure should support service margin resilience even if competitive intensity remains elevated. With macro pressure on discretionary upgrades, a steadier mix of higher-margin service revenue should help gross-to-operating conversion.
Most promising business: Fiber broadband scale-up
Consumer Wireline fiber continues to exhibit double-digit revenue growth, aided by net adds, expanding footprint, and rising ARPU. Fourth-quarter 2025 fiber revenue increased 13.6% year over year to 2.20 billion US dollars, and the fiber-plus-fixed-wireless “Internet Air” products together drove more than half a million advanced home internet net additions for a second consecutive quarter. For the first quarter of 2026, we expect fiber revenue to remain the lead growth engine within Wireline, with momentum from footprint expansion and convergence attach into wireless accounts.
Execution hinges on build cadence and installation capacity, but the announced Lumen Mass Markets fiber assets acquisition, expected to close in early 2026, and the planned equity partner structure should expand addressable opportunity and future scaling. Near term, the transaction is not included in continuing operations results until close; however, investor focus will be on any color regarding integration timelines and the degree to which newly acquired passes can accelerate Consumer fiber net adds and revenue growth as the year progresses.
Factors most impacting the stock this quarter
- Service revenue quality and churn: Investors will scrutinize postpaid phone net adds, churn, and ARPU for signs that competitive promotions are contained and convergence is sustaining tenure and cross-sell. Any deviation from steady churn or a dip in ARPU would likely pressure the stock more than small revenue variances.
- Business Wireline drag versus cost takeout: Legacy decline remains the principal offset to growth. Continued cost transformation and lower depreciation on fully depreciated legacy assets need to hold the EBITDA line. Management commentary about the pace of powering down copper and migrating customers will frame 2026–2028 margin expectations.
- Capital intensity, free cash flow, and leverage glidepath: With EBIT up an estimated 9.18% and the company reiterating long-term free cash flow ambitions, investors will parse capital expenditures, vendor financing, and working-capital timing. Any update regarding timing of spectrum and fiber transactions and the post-close leverage trajectory will influence sentiment, even if Q1 free cash flow is seasonally softer.
Analyst Opinions
Institutional views are predominantly constructive in the calendar year-to-date window ending April 15, 2026, with multiple Buy reiterations outweighing Holds and few explicit bearish calls. Notable recent positive opinions include Buy ratings from RBC Capital (target 29.00 US dollars), Bernstein (target 30.00 US dollars), KeyBanc’s upgrade to Overweight with a 30.00 US dollars target, and William O’Neil’s Buy initiation. TD Cowen maintained Hold, citing a mixed quarter with tax-driven cash flow support and long-term fiber/5G upside; Goldman Sachs maintained a Buy tied to bundled fiber–wireless convergence positioning. The ratio of bullish to neutral/bearish opinions in this period skews favorably toward bullish, with Buys well exceeding Holds and no major Sell initiations highlighted.
The prevailing majority view argues that AT&T Inc’s execution on convergence and fiber scaling can support mid-single-digit service revenue growth in Advanced Connectivity and improving free cash flow through 2026–2028, while Business Wireline headwinds are manageable within the current cost and capex frameworks. Analysts emphasize three points: stable Mobility service revenue with contained churn; fiber-led Consumer Wireline growth with rising ARPU; and adequate capital allocation to fund spectrum and fiber while targeting leverage in the low-3x area post-transactions and progressing toward the 2.5x range over the medium term. These assessments align with consensus estimates showing revenue up 2.87% year over year and EPS up 12.94% for the current quarter, framing an expectation for margin improvement driven by mix and operating discipline rather than unit-led upside surprises.
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