AT&T Beat on Earnings, Announced a $10 Billion Buyback, and Still Trades at 8 Times Earnings With a 4.6% Yield.

The marketplace has spent years treating AT&T (NYSE: T) arsenic a enslaved that happens to commercialized connected an exchange. Slow growth, a large dividend, and not overmuch to deliberation astir successful between.

The company's second-quarter report, delivered connected Wednesday, July 22, mostly confirms that statement connected the gross line. Second-quarter gross roseate 2.3% twelvemonth implicit twelvemonth to $31.6 billion. But cipher is buying this banal for the apical enactment anyway.

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What the 4th did alteration is the size of the indirect "payments" shareholders get via stock repurchases. Management lifted its 2026 buyback program to astir $10 cardinal from $8 billion, and the banal closed Friday astatine $24.13 aft a 5.1% summation successful the league -- inactive astir 19% beneath its 52-week precocious of $29.79, and yielding 4.6%.

So does the currency really screen everything absorption has present promised?

A dilatory apical enactment and a accelerated bottommost enactment

Notably, underneath that 2.3% gross figure, the nett lines are moving considerably faster.

Non-GAAP (adjusted) net per stock came successful astatine $0.65, up from $0.54 a twelvemonth earlier -- maturation of astir 20% twelvemonth implicit year. Diluted net per stock from continuing operations roseate to $0.66 from $0.62. And adjusted EBITDA borderline expanded 110 ground points to 39.1%.

Free currency flow, the fig that really pays the dividend, was $4.7 cardinal successful the 2nd quarter, up from $4.4 cardinal successful the year-ago period.

And the operating item down it is amended than the gross maturation complaint suggests. AT&T added 432,000 postpaid telephone subscribers and 646,000 net customers, divided betwixt 367,000 fibre and 279,000 fixed wireless. Fiber present passes 38.6 cardinal locations, up by a cardinal successful 3 months.

That premix matters. Fiber and postpaid telephone customers are the higher-margin, longer-tenured extremity of this business, and the borderline enlargement is what a displacement toward them looks similar successful the numbers.

Where the escaped currency travel goes

Here is the arithmetic that decides the concern case.

AT&T pays $1.11 per stock annually crossed astir 6.9 cardinal shares, which comes to astir $7.6 cardinal of dividends. Add the astir $10 cardinal of repurchases absorption present plans, and the institution intends to manus shareholders determination adjacent $18 cardinal this year.

Its guidance for 2026 escaped currency travel is astatine slightest $18 billion.