It seems an earnings beat, raised profit guidance, and bigger stock buybacks aren't quite enough for AT&T investors on Wednesday. SpaceX and its Starlink Mobile service are hitting telecom stocks once again.

AT&T stock was falling in early trading on Wednesday, one of the worst performers in the S&P 500 as it tumbled more than 5% despite what, on the face of it, was a great set of results. The stock is at risk of notching its largest post-earnings decline since April 2023, when it fell 10.4%.

Verizon Communications stock was down 2.7% and T-Mobile US stock shed 2.7% in Wednesday trading.

Revenue at AT&T rose 5.3% annually in the third quarter to $32.3 billion, beating estimates among analysts surveyed by FactSet of $31.69 billion. Adjusted earnings per share (EPS) of 65 cents topped analysts' forecasts of 60 cents per share.

More good news: AT&T sees adjusted EPS in the $2.40 range for 2026, ahead of the $2.25 to $2.35 range it guided in July.

There is also reason to believe the telecom's prized dividend is safe, at least for now, with the $1.11 per share annualized payout also confirmed by Stankey. AT& T's dividend yield stands at 4.7%, as of Tuesday's close -- well above the S&P 500's record low of 1.07% for the second quarter of this year.

Words from chairman and CEO John Stankey brought more to be happy about -- stock buybacks.

"The accelerated growth we delivered this quarter shows our structural advantages to lead the next era of connectivity," CEO John Stankey said in a statement. "We are accelerating the pace of our planned share repurchases this year to approximately $10 billion, reflecting our confidence in our market position."

So why is AT&T stock dropping after earnings?

SpaceX and Starlink are casting a long shadow, along with a closely watched telecom metric: postpaid phone subscribers.

AT&T said it added 379,000 postpaid phone subscribers in the quarter, in line or slightly below what some telecom analysts had been eyeing, depending on who you survey.

It is, at least, underwhelming after a 432,000 postpaid add in the second quarter, which crushed estimates at the time.

Postpaid phone subscriptions, referring to customers who pay monthly, are critical for wireless companies because they represent predictable and long-term recurring revenue.

Reading into the tea leaves of postpaid subscribers is how investors can see into the price wars -- and potential competition from new entrants like SpaceX -- that have battered telecom stocks.

The COO of SpaceX, the satellite internet pioneer pushing into telecoms, said following that company's earnings late Tuesday that Starlink Mobile had surpassed 22 million monthly users, up 37% since the last quarter.

SpaceX CEO Elon Musk weighed in on X: "Veterans of the cellular industry look at the chess board of existing pieces and don't see a solution. They don't understand that SpaceX is developing entirely new pieces that fundamentally alter the strategic landscape."

AT&T's postpaid numbers alone likely weren't enough to see stock selling of Wednesday's magnitude, however.

Reading into the tea leaves of postpaid subscribers is also how investors can see into the price wars -- and potential competition from entrants like SpaceX -- that have hit telecom stocks.