AT&T's bundled plans spur subscriber surge, tax savings to fund fiber expansion
The U.S. telecom giant added 401,000 net monthly bill-paying wireless phone subscribers in the second quarter, it said on Wednesday, flying past FactSet estimates of 295,700. Rival Verizon lost 9,000 customers during the same period.
AT&T also disclosed plans to invest about $3.5 billion from savings unlocked by the Trump administration's new tax law to accelerate its fiber network build-out, a critical growth area as the wireless market saturates and internet usage surges.
The tax law allows companies to immediately write off the full cost of certain new equipment and boosted annual forecast at Verizon on Tuesday.
Savings from the law could help wireless carriers better challenge broadband giant Comcast, which has also been making inroads into wireless.
AT&T expects to save $6.5 billion to $8 billion in cash taxes through 2027 under the new tax reforms, and now projects free cash flow to be about $1 billion higher than previously forecast for both 2026 and 2027.
The company added 243,000 fiber customers.
AT&T said it expects the acquisition of Lumen's mass markets fiber business, set to close in the first half of 2026, to propel it to more than 60 million fiber locations by the end of 2030.
It reported revenue of $30.8 billion, beating estimates of $30.50 billion, according to data compiled by LSEG. Adjusted earnings per share of 54 cents also surpassed expectations of 51 cents.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNA
5 hours ago
- CNA
Microsoft's AI edge under scrutiny as OpenAI turns to rivals for cloud services
Microsoft investors head into Wednesday's earnings with one big question: is the company's artificial intelligence edge at risk as partner OpenAI turns to rivals Google, Oracle and CoreWeave for cloud services? Exclusive licensing deals and access to OpenAI's cutting-edge models have made Microsoft one of the biggest winners of the generative AI boom, fueling growth in its Azure cloud business and pushing its market value toward $4 trillion. In the April-June quarter, the tie-up is expected to have driven a 34.8 per cent increase in Azure revenue, in line with the company's forecast and higher than the 33 per cent rise in the previous three months, according to data from Visible Alpha. But that deal is being renegotiated as OpenAI eyes a public listing, with media reports suggesting a deadlock over how much access Microsoft will retain to ChatGPT maker's technology and its stake if OpenAI converts into a public-benefit corporation. The conversion cannot proceed without Microsoft's sign-off and is crucial for a $40 billion funding round led by Japanese conglomerate SoftBank Group, $20 billion of which is contingent on the restructuring being completed by the end of the year. OpenAI, which recently deepened its Oracle tie-up with a planned 4.5 gigawatts data center capacity, has also added Google Cloud among its suppliers for computing capacity. UBS analysts said investor views on the Microsoft–OpenAI partnership are divided, though the software giant holds an upper hand. "Microsoft's leadership earned enough credibility … such that the company will end up negotiating terms that will be in the interest of its shareholders," the analysts said. Some of that confidence is reflected in the company's stock price, which has risen by more than a fifth so far this year. In the April-June period, Microsoft's fiscal fourth quarter, the company likely benefited from a weaker dollar, stronger non-AI Azure demand and PC makers pulling forward orders for its Windows products ahead of possible U.S. tariffs. Revenue is expected to have risen 14 per cent to $73.81 billion, according to data compiled by LSEG, its best growth in three quarters. Profit is estimated to have increased 14.2 per cent to $25.16 billion, slightly slower than the previous quarter as operating costs rose. Capital spending will also be in focus after rival Alphabet raised its annual outlay by $10 billion last week. Microsoft has repeatedly said it remains capacity constrained on AI, and in April signaled continued growth in capex after planned spending of over $80 billion last fiscal year, though at a slower pace and on shorter-lived assets such as AI chips. Dan Morgan, senior portfolio manager at Synovus Trust who owns Microsoft shares, said the spending has been paying off.
CNA
5 hours ago
- CNA
PayPal lifts 2025 profit forecast above estimates as turnaround picks up pace
PayPal raised its full-year profit forecast above Wall Street estimates on Tuesday, as the digital payments giant's push to revive growth in high-margin businesses such as Venmo and U.S. checkout begins to pay off. Under CEO Alex Chriss, PayPal has shifted its focus to profitability rather than chasing top-line growth. The company is trying to regain momentum in parts of its business that lost steam after the pandemic-era e-commerce boom faded and competition intensified. PayPal's Venmo, a platform that has become virtually synonymous with peer-to-peer payments in the U.S., posted revenue growth of 20 per cent for the second quarter. The unit's total payment volume growth accelerated to its highest rate in three years. On a per-share basis, the payments firm now expects an adjusted annual profit in the range of $5.15 to $5.30 versus its prior expectations of $4.95 to $5.10. Analysts on average had expected $5.10, according to estimates compiled by LSEG. Transaction margin dollars - the profit PayPal makes on each transaction after covering direct costs - grew 7 per cent to $3.8 billion in the quarter. The increase reflects an ongoing push to drive higher-margin volumes across the company's branded checkout products and streamline costs tied to unbranded processing. Adjusted operating margins expanded 132 basis points to 19.8 per cent. Margins have been a key source of investor concern in recent years, amid fears that Big Tech rivals such as Apple Pay and Google Pay are chipping away at PayPal's market share. While the company long held a first-mover advantage in digital payments, that edge has diminished, though PayPal has previously pushed back against concerns that its market share is under pressure. SPENDING HOLDS UP Meanwhile, U.S. consumers have continued to spend despite a mix of economic pressures, including persistent inflation and the threat of new trade policies, easing concerns about a potentially sharp pullback in transaction volumes. Analysts say some shoppers are also buying early to avoid expected price hikes from tariffs later this year. That resilience has helped PayPal and major U.S. lenders sidestep early worries that trade tensions could weigh on spending in the second quarter, even as lower-income households show signs of strain. Total payment volume - which tracks the total value of transactions handled by the platform - increased 6 per cent to $443.5 billion. Adjusted profit came in at $1.40 per share in the three months ended June 30. That compares with $1.19 per share a year earlier. PayPal's second-quarter net revenue climbed 5 per cent to $8.3 billion.
CNA
5 hours ago
- CNA
LG Innotek to take stake in lidar maker Aeva as part of $50 million deal
SAN FRANCISCO :Aeva Technologies said on Tuesday that South Korean camera module maker LG Innotek will take an equity stake in Aeva as part of a $50 million strategic collaboration. Aeva makes lidar sensors that help vehicles and industrial equipment gain a detailed three-dimensional view of their environment and detect how fast surrounding objects are moving. It supplies sensors to vehicle firms such as Daimler Truck and industrial equipment makers such as Nikon. As part of the deal, LG Innotek will make a $32 million equity investment in Aeva for a "single-digit percentage ownership" in the company, Aeva CEO Soroush Salehian told Reuters in an interview. The remainder of the deal will go toward building production capacity for sensors that can go into robotics and consumer devices, in addition to Aeva's existing markets of vehicles and industrial equipment. 'The ultimate goal of this partnership is for LG Innotek and Aeva to grow together as key players leading the next-generation lidar market through a long-term technology partnership that goes beyond the supply of products,' the South Korean electronics supplier's CEO, Hyuksoo Moon, said in a statement. Salehian told Reuters that Aeva is working to integrate its entire sensor into a single chip whose price can be driven low enough to make it viable in consumer electronics such as augmented reality headsets. "The roadmap that we're going towards is double-digit dollars," Salehian told Reuters. "We are already working towards the next generation that will allow for a very low-cost solution, which we think will be a game changer for mass adoption of what we call precision sensing."
