AT&T raises 2026 profit outlook as it trims spending plans

AT&T reported third-quarter earnings per share of $0.65, four cents above expectations. Revenue came in at $32.32 billion, in line with forecasts.

The company raised its 2026 adjusted earnings per share outlook to around $2.40. It also lowered its capital spending plans, now expecting to invest $23 billion to $24 billion in 2026 and $22 billion to $23 billion a year in 2027 and 2028.

AT&T said it expects free cash flow of more than $18 billion in 2026, rising to more than $19 billion in 2027 and more than $21 billion in 2028. It plans to keep its annualized dividend at $1.11 per share and to buy back more than $24 billion in stock over 2026 to 2028, including about $10 billion next year. The company reaffirmed a target of returning more than $45 billion to shareholders through dividends and buybacks over that period.

The combination of a smaller capital budget and higher free cash flow targets gives AT&T room to fund those shareholder payouts without adding pressure to its balance sheet, a change from the heavier spending of recent years. That shift follows the October 16 announcement that AT&T would divest its Mexico wireless business, part of a wider simplification of the company. AT&T said its net debt to adjusted EBITDA ratio is not expected to reach its target of around 2.5 times until 2029, even as it commits to higher earnings guidance and a steady dividend.