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DividendenPapa
@DividendenPapa
1Sem.·

AT&T Q3 2026 – Strong Results, but an Exit Is Still on the Horizon

$T (-1,06 %) exceeded expectations and raised its earnings outlook. Nevertheless, I took a critical look at the numbers and ultimately decided to exit the position.


Here’s a look at my key watchouts:

  • Dividend: Still $1.11 annually. An increase is not in sight. Since the cut in 2022, there has been a lack of a key signal for sustainable dividend growth.
  • Operational Performance: Revenue rose 5.3% to $32.3 billion, and adjusted EPS increased from $0.54 to $0.65. Operationally, this is certainly positive, but for me, that alone isn’t enough to confirm the long-term quality of the business.
  • Debt: Net debt rose to $149.8 billion, primarily due to the Spectrum acquisition. The company is not expected to reach its target range of 2.5x net debt to EBITDA until 2029.
  • Share Buybacks: During the quarter, shares worth $2.8 billion were repurchased. Approximately $10 billion is planned for 2026. Given the high level of debt, I question whether this capital allocation makes sense in the long term and creates sufficient value per share.
  • Customer growth:
    $T (-1,06 %) The company gained 696,000 new Advanced Home Internet customers, including 416,000 fiber-optic and 280,000 Internet Air customers. In addition, there were 379,000 new postpaid mobile customers. Growth is strong, but average revenue per fiber-optic customer fell by 4%—growth and profitability must align in the long term.
  • Outlook: The EPS forecast for 2026 has been raised to approximately $2.40. The company has also set $T (-1,06 %) at a minimum of $18 billion for 2026 and $21 billion by 2028. Positive, but sustainable implementation remains to be seen.


My conclusion: $T (-1,06 %) The company is showing operational progress, but the lack of a dividend increase, the high debt, and the as-yet unconvincingly demonstrated trend in cash flow per share weigh heavily on my assessment. The positive figures do not change my fundamental doubts about the investment thesis.

I have therefore decided to exit the position. Not because of a single quarter, but because $T (-1,06 %) it does not meet my requirements for a long-term dividend growth compounder.

Sometimes, consistent investing also means ending an investment thesis.


https://de.investing.com/news/transcripts/att-ubertrifft-erwartungen-im-dritten-quartal-2026--aktie-gibt-vorborslich-nach-93CH-3715467


~ Not investment advice ~

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DividendenPapa
@DividendenPapa
1Sem.·

AT&T Ahead of Its Quarterly Earnings Report and the Question of Whether This Trend Will Last

On Wednesday, October 21, $T (-1,06 %) the Q3 earnings report. $T (-1,06 %) It’s already in my portfolio. However, its performance so far and my weakened investment thesis still make me somewhat skeptical. That’s why I review the position regularly. I don’t currently plan to buy more shares.


My Key Watchouts:

  • Dividend: There hasn’t been an increase since the cut in 2022. When can we expect sustainable dividend growth again?
  • Operational performance: How are earnings and free cash flow per share performing?
  • Debt: Is debt reduction continuing to make progress?
  • Share Buybacks: Are the buybacks covered by free cash flow, and do they create long-term value per share?
  • Customer growth: Will mobile communications and fiber optics remain profitable growth drivers?
  • Outlook: Does management provide convincing arguments for sustainable improvement?


My current approach:

For now, I am not expanding the position further and am monitoring the fundamental developments. What matters most to me is sustainable growth in earnings and cash flow per share, progress in debt reduction, and a return to positive dividend growth. If this progress fails to materialize or the quality of the business continues to deteriorate, I will seriously consider selling. My focus is not on short-term price fluctuations, but rather on whether $T (-1,06 %) my long-term quality criteria are met again.


How do you assess the future performance of $T (-1,06 %)?


~Not investment advice~

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