Image Source: TradingView
By Brian Nelson, CFA
On April 22, AT&T (T) reported first quarter results that beat the consensus estimates on both the top and bottom lines. Operating revenue in the first quarter of 2026 was $31.5 billion, up 2.9% year-over-year, reflecting higher Advanced Connectivity wireless and fiber revenue. Operating revenue in Mexico also advanced, while lower Legacy revenue proved to be a headwind. First-quarter 2026 income from continuing operations totaled $4.2 billion, or $0.54 per diluted share, down from $0.61 in the first quarter of 2025.
Cash from operating activities from continuing operations in the first quarter of 2026 was $7.6 billion, down $1.5 billion when compared to 2025, with prior-year operating cash flows including $1.4 billion of distributions from DIRECTV. Capital expenditures in the first quarter of 2026 were $4.9 billion, and when including $0.2 billion cash paid for vendor financing, capital investment was $5.1 billion, compared to prior-year first quarter capital investment of $4.5 billion (capital expenditures of $4.3 billion and vendor financing of $0.2 billion).
For the quarter ended March 31, 2026, AT&T repurchased $2.3 billion of shares, and the amount remaining under authorization was $13.5 billion as of March 31, 2026. AT&T remains a free cash flow cow, though the $2.5 billion it generated in the first quarter came in lower than expectations. AT&T continues to operate in a high capital intensity business, and competition remains fierce. Looking to the full year 2026, consolidated adjusted EBITDA is targeted to grow 3%-4%, with adjusted earnings per share in the range of $2.25-$2.35. Free cash flow is expected to exceed $18 billion for the full year. Shares yield 4.2%.
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Brian Nelson owns shares in SPY, SCHG, QQQ, QQQM, DIA, VOT, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, QQQM, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, RSP, SCHG, QQQ, QQQM, and VOO. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.
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