By Connor Hart and Denny Jacob
AT&T logged higher profit and revenue in the first quarter, boosted in part by an increase in acquired customers and a spur of upgrades in response to tariffs.
"Upgrades have trended higher than expected since the announcement of the reciprocal tariffs in early April, which we believe triggered an acceleration in consumer upgrade behavior," Chief Financial Officer Pascal Desroches said on an earnings call.
Tariffs imposed by the Trump administration have spurred some consumers to stock up on goods including rice and extra virgin olive oil, while others are pulling the trigger on pricier items such as furniture in order to avoid price increases down the road.
Chief Executive John Stankey said the company believes it can manage the anticipated higher costs within its 2025 guidance based on the 90-day pause on reciprocal tariffs, implemented earlier this month, and AT&T's visibility into its supply chain.
"If ultimately costs are passed to us from those that we buy handsets from, unfortunately for the customer we're going to have to come up with some new ways for them to figure out how to digest that increase in pricing," added Stankey.
The Dallas company notched 324,000 postpaid phone net adds during the quarter, in addition to 261,000 AT&T Fiber net adds.
AT&T's gains stand in contrast to those of competitor Verizon Communications on Tuesday. Verizon lost 289,000 wireless postpaid phone business and consumer subscribers, worse than its 114,000 postpaid phone net loss in the year-ago period.
Shares edged down 0.7% to $27.15, paring back earlier gains made in premarket trading. The stock is up about 19% on the year so far.
The telecommunications company on Wednesday posted net income attributable to common stock of $4.4 billion, or 61 cents a share, compared with $3.4 billion, or 47 cents a share, a year earlier.
Adjusted per-share earnings came in at 51 cents, in line with the expectations of analysts polled by FactSet.
Revenue ticked up 2%, to $30.63 billion, ahead of the $30.36 million the analysts modeled.
AT&T said it plans to commence share repurchases in the current quarter, saying it is operating within its net leverage target of net debt to adjusted Ebitda--or earnings before interest, taxes, depreciation and amortization--based on its reduction in net debt and outlook.
Desroches said on the call that AT&T expects at least $3 billion in share repurchases under its $10 billion authorization will be completed by year-end, with the remainder of repurchases slated to take place in 2026.
The company backed its 2025 guidance, which calls for adjusted per-share earnings of $1.97 to $2.07, slightly lower than analyst views for $2.08, according to FactSet.
AT&T also expects consolidated service revenue to rise in the low-single-digit range, and for adjusted Ebitda to rise at least 3%.
Write to Connor Hart at connor.hart@wsj.com and Denny Jacob at denny.jacob@wsj.com
(END) Dow Jones Newswires
April 23, 2025 10:37 ET (14:37 GMT)
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