AT&T Earnings: Wireless Competition Remains Challenging; Full Steam Ahead on Network Investment

AT&T’s first-quarter revenue increased by 2.9%, driven by wireless phone sales and the acquisition of Lumen, though margins and cash flow were lower year-over-year. Competitive intensity in the US wireless industry remains high, as indicated by a rise in postpaid phone customer disconnects and slower wireless services revenue growth. Morningstar maintains a $27 per share fair value estimate, noting the company’s convergence strategy will drive growth despite heavy capital spending, but suggests a larger margin of safety is needed for investment due to industry uncertainties.