AT&T (T): record internet customer additions and a higher 2026 profit outlook, but a $2.6bn Mexico charge cuts reported earnings

AT&T reported third-quarter revenue of $32.3bn, up 5.3%, and adjusted profit per share of $0.65, up from $0.54. It added a record 769,000 home and business internet customers and raised its 2026 adjusted profit forecast to about $2.40, while a $2.6bn non-cash charge on its Mexico business cut reported earnings to $0.13 a share.

What happened

On 21 October 2026 AT&T published its third-quarter results in a release filed with the US Securities and Exchange Commission (SEC). Revenue was $32.3bn, against $30.7bn a year earlier. The company added 769,000 internet customers across its "Advanced Connectivity" products, its name for fibre broadband and fixed wireless home internet, which is internet delivered over its mobile network. Of these, 442,000 were fibre and 327,000 were fixed wireless. It also added 379,000 postpaid phone customers, meaning people on monthly contracts rather than prepaid plans, and said it passed 1 million Advanced Connectivity additions for a second quarter running.

The quarter also contained a large accounting charge. On 13 October 2026 AT&T agreed to sell its Mexico wireless business to Grupo Televisa and Fintech Holdings. From 30 September the business is treated as "held for sale", an accounting label meaning it is expected to be sold rather than kept, and AT&T wrote its value down by $2.6bn. This is a non-cash impairment, meaning no money left the company; it reduces reported profit because the business is now valued lower in the accounts.

The numbers, explained

Reported profit per share from continuing operations (the businesses AT&T is keeping) was $0.13, compared with $1.29 a year earlier. That is a fall of 90%, from $1.29 to $0.13 (1.16 / 1.29). The year-ago figure was unusually high because it included a gain on the sale of AT&T's stake in DIRECTV, so the comparison is distorted in both directions. Adjusted profit per share, which is AT&T's own measure that removes one-off and non-cash items, was $0.65 against $0.54, a rise of 20.4% (0.11 / 0.54). The company's bridge is simple and we checked it: $0.13 reported plus $0.52 of adjustments, mainly the Mexico impairment and employee separation charges, equals $0.65.

Segment figures show where the growth came from. Advanced Connectivity revenue was $29,481m against $27,503m, up 7.2% (1,978 / 27,503), and its operating income, the profit from running the business before interest and tax, rose from $6,417m to $7,628m, up 18.9% (1,211 / 6,417). Its operating margin, operating income as a share of revenue, rose from 23.3% to 25.9% (7,628 / 29,481). Within it, advanced home internet revenue grew 23.4%, from $2,975m against $2,411m, helped by the fibre business bought from Lumen in February 2026.

Cash figures were steadier. Cash from operations was $10.5bn against $10.2bn. After capital expenditure, the cash spent on networks and equipment, free cash flow, the cash left over for dividends, debt and buybacks, was $5.0bn against $4.9bn. This is a non-GAAP measure, meaning it is not defined by US accounting rules. Total debt was $159.6bn and net debt, debt less cash, was $149.8bn, both higher because AT&T closed its purchase of wireless spectrum licences from EchoStar during the quarter. Third-party analysts had expected adjusted profit per share of about $0.60 and revenue of about $31.69bn (as reported by Investing.com); those are estimates, not facts.

Why it matters

AT&T earns money by selling connections: monthly mobile plans, home internet over fibre or its wireless network, and services to businesses. Its strategy is "convergence", selling both phone and home internet to the same household, which tends to keep customers longer. The release said 42.8% of households with its advanced home internet also chose AT&T wireless.

The outlook changed in two ways, and both are company forecasts, not results. Adjusted profit per share for 2026 is now expected "in the $2.40 range", up from $2.25 to $2.35 in the July release. On the earnings call, as reported by Investing.com, the finance chief attributed the change primarily to lower depreciation (the yearly write-off of the cost of equipment) from the held-for-sale treatment of Mexico, so part of the lift is accounting rather than new customers. Capital investment for 2027 and 2028 is now $22bn to $23bn a year, from $23bn to $24bn. Free cash flow guidance of $18bn or more for 2026 is unchanged.

What to watch next

The release says AT&T expects to reach more than 40 million fibre locations by the end of 2026 and more than 60 million by the end of 2030. It plans $45bn or more of returns to shareholders in 2026 to 2028 and expects its net debt to adjusted EBITDA ratio (debt compared with annual operating earnings before depreciation) to return to about 2.5 times during 2029. Completion of the Mexico sale depends on the agreement the company signed on 13 October, and the release did not give a closing date, so we do not state one. We leave out share-price moves because sources differed.

• Adjusted profit per share: AT&T's own measure, excluding one-off and non-cash items; not a GAAP figure
• Impairment: a non-cash write-down of an asset's value in the accounts
• Fixed wireless: home internet delivered over the mobile network instead of a cable
• Free cash flow: cash from operations minus capital spending; non-GAAP

Sources

• AT&T Q3 2026 results release, Form 8-K Exhibit 99.1 (SEC)
• AT&T Q2 2026 results release, Form 8-K Exhibit 99.1 (SEC)
• AT&T Q3 2026 earnings call transcript (Investing.com)
• AT&T Q3 2026 revenue rises 5.3% to $32.3 billion (TelecomLead)
• AT&T added a record 769,000 internet customers in Q3 2026 (Cord Cutters News)