Market Defying Gains: AT&T Stock Surges Amidst Broader Market Slump
Despite a gloomy market backdrop, AT&T (NYSE: T) shares are experiencing a remarkable upswing, with a 7% increase as of 3:15 p.m. ET. This surge stands in stark contrast to the S&P 500’s 1.8% decline and the Nasdaq Composite’s 3.6% drop.
Earnings Report Sparks Optimism
The telecom giant’s impressive fourth-quarter results, released earlier today, have fueled investor enthusiasm. AT&T reported adjusted non-GAAP earnings per share of $0.54 on sales of $32.3 billion, surpassing Wall Street’s expectations of $0.51 and $31.94 billion, respectively.
Segment Growth Drives Revenue Increase
AT&T’s revenue grew 0.9% year over year in Q4, driven by strong performances in its mobility services and consumer broadband segments. Mobility services saw a 3.3% year-over-year increase to $16.6 billion, while consumer broadband revenue rose 7.8% to $2.9 billion. The company also added 482,000 net postpaid phone service subscribers and 307,000 fiber service subscribers during the quarter.
Guidance and Future Outlook
In conjunction with its Q4 report, AT&T provided guidance for 2025, anticipating low-single-digit growth in overall service revenue. The company expects mobility service revenue to grow between 2% and 3%, with fiber consumer broadband revenue increasing at a mid-teens rate. Excluding DirecTV, AT&T forecasts adjusted earnings per share between $1.97 and $2.07, with free cash flow of approximately $16 billion.
AI Investments and Shareholder Value
AT&T’s plans to significantly increase its investments in artificial intelligence (AI) have also sparked investor excitement. The company aims to leverage AI to improve service performances and reduce operating expenses, which could have a positive impact on margins. Furthermore, AT&T plans to deliver $40 billion in dividends and stock buybacks over the next three years, demonstrating its commitment to returning value to shareholders.
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