The High Costs of Trump's ‘Big Beautiful' New Car Loan Deduction
Within the 330 pages of this megabill is a provision presented as aid to the $1.6 trillion US auto industry. For the first time, Americans will be able to deduct interest payments on new car loans when calculating their taxes.
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Yahoo
13 minutes ago
- Yahoo
AT&T Shares Have Sunk Despite a Subscriber Surge. Time to Buy the Dip?
Key Points AT&T continues to see strong subscriber additions. However, investors were disappointed that the company did not raise guidance. 10 stocks we like better than AT&T › AT&T (NYSE: T) has quietly been a great-performing stock over the past couple of years, but it has pulled back after the company failed to raise its guidance when it reported its second quarter results. Investors were expecting a hike after rival Verizon Communications did so a couple of days earlier. Let's look at AT&T's results to see if the pullback is a buying opportunity. Strong subscriber growth When it comes to wireless subscriber growth, AT&T has taken advantage of a Verizon price hike earlier this year to gain customers. In the second quarter, it added 479,000 retail postpaid subscribers, including 401,000 retail postpaid phone additions. It did lose 34,000 prepaid subscribers, but that is generally viewed as a less important segment than subscribers who get a monthly bill. Overall mobility-segment revenue increased 6.7% to $21.8 billion. Mobility service revenue rose 3.5% to $16.9 billion, while equipment sales surged 18.8% to $5 billion. Postpaid phone average revenue per subscriber (ARPU) edged up 1.1% to $57.04. Turning to broadband, AT&T added 243,000 fiber subscribers and 203,000 internet air subscribers. The company lost 93,000 non-fiber subscribers as they continued to switch to faster options. Broadband ARPU climbed by 7.5% to $71.16, while fiber ARPU rose by 6.2% to $73.26. Total consumer broadband revenue was up 5.8% to $3.5 billion. Fiber will be a big focus for the company, with it looking to ramp up its investment to a pace of 4 million new locations per year. It just surpassed 30 million fiber locations and is looking to double that number by 2030, including through assets it has agreed to acquire, its Gigapower joint venture with BlackRock, and agreements it has with other commercial open-access providers. The investment in fiber will be helped by new tax provisions in the "One Big, Beautiful Bill" that allow some assets to immediately be fully depreciated in the year they go into use. On the downside, AT&T's business wireline segment saw a 9.3% decrease in revenue to $4.3 billion. The segment flipped from an operating profit of $102 million in the second quarter of last year to a loss of $201 million this year. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the segment fell 11.3% to $1.3 billion. Total revenue rose by 3.5% to $30.8 billion, while adjusted earnings per share (EPS) jumped by 5.8% to $0.54. The results surpassed Wall Street expectations for adjusted EPS of $0.52 on revenue of $30.8 billion. AT&T generated $9.8 billion in operating cash flow, and free cash flow of $4.4 billion. It paid out just over $2 billion in dividends, good for a coverage ratio of 2.2 times. The company has held its quarterly dividend of $0.28 steady since May 2022, and the stock currently has about a 4% forward dividend yield. Looking ahead, the company largely kept its guidance intact, which was disappointing after Verizon raised its full-year EPS outlook. AT&T is looking for its mobility service revenue to grow by 3% or better, with adjusted EPS of between $1.97 to $2.07, which would be down from the $2.26 it produced in 2024. It forecast free cash flow to be in the low to mid $16 billion range. Metric Prior Guidance New Guidance Mobility service revenue growth The higher end of 2% to 3% 3% or better Adjusted EPS $1.97 to $2.07 $1.97 to $2.07 Adjusted EBITDA 3% or better 3% or better Free cash flow $16 billion-plus In the low to mid $16 billion range Source: AT&T Further out, AT&T expects to spend between $23 billion to $24 billion a year on capital expenditures (capex) in both 2026 and 2027. It projects that its free cash flow will be more than $18 billion in 2026 and more than $19 billion in 2027. Should investors buy the dip? AT&T has been taking it to Verizon in subscriber additions, offering more-aggressive deals on smartphones and keeping prices lower than its rivals, while committing to strong network reliability. Its overall second-quarter results were solid; however, investors were clearly looking for the company to raise EPS guidance after Verizon increased its forecast and with the tax benefits it will see from the One Big, Beautiful Bill. But these tax benefits will eventually hit the bottom line, and the company is looking to take advantage of the bill to more aggressively grow its fiber network. That's a smart move given that Verizon is set to greatly expand its fiber network when it completes its acquisition of Frontier Communications next year. Also, 2026 could be the year of the bundle for wireless companies, and AT&T is looking to ramp up its fiber network to compete against what should become a stronger Verizon. Even with the stock's pullback, AT&T still trades at a large premium to Verizon. It has a forward price-to-earnings multiple (P/E) of about 13.5 based on 2025 earnings estimates, versus a forward P/E of 9 for Verizon. Until recently, Verizon historically had the higher multiple. Given the valuation gap, its higher yield (about 6%), and Verizon's impending Frontier acquisition, I prefer it over AT&T. Nonetheless, I think both can be strong long-term investments, and both should benefit from the One Big, Beautiful Bill. Should you invest $1,000 in AT&T right now? Before you buy stock in AT&T, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and AT&T wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,063,471!* Now, it's worth noting Stock Advisor's total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy. AT&T Shares Have Sunk Despite a Subscriber Surge. Time to Buy the Dip? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13 minutes ago
- Yahoo
Trump Says U.S. Reached a Trade Deal With European Union
President Trump announced a trade agreement between the U.S. and the European Union after meeting European Commission President Ursula von der Leyen, marking his biggest deal so far. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Insider
13 minutes ago
- Business Insider
Trump strikes a deal with the EU on tariffs
The US and the EU reached a trade deal on Sunday after negotiations in Scotland between President Donald Trump and European Commission President Ursula von der Leyen. The deal sets 15% tariffs on most European goods imported to the United States, a significant reduction from the 30% Trump had threatened earlier, but more than the 10% the EU originally sought. In return, Trump said the EU would ramp up investments in the United States. "The European Union is going to agree to purchase from the United States $750 billion worth of energy," Trump told reporters. "They are going to agree to invest into the United States $600 billion more than they're investing already." The EU also agreed to purchase a "vast amount" of military equipment from the US. "I think it's the biggest deal ever made," Trump said. There are some exceptions to the 15% tariffs, including steel, which Trump said would remain at the 50% he earlier set for all countries worldwide. The agreement comes days before August 1, when the Trump administration's tariffs will go into effect for numerous countries, some of which could face levies as high as 50%. Commerce Secretary Howard Lutnick said Sunday that there would be no more extensions and that tariffs would go into effect on August 1 as planned.
