AT&T bets on fiber, spectrum deals to forecast annual profit above expectations

Jan 28 (Reuters) - AT&T (T) forecast annual profit above market expectations on Wednesday, on bets that its wireless and fiber network ​expansion would allow the U.S. carrier to tap growing 5G ‌and high-speed internet demand.

AT&T's stock rose 5% during premarket hours on Wednesday.

The bullish forecast hinges on AT&T's infrastructure push, anchored by two ‌major deals — a nearly $6 billion purchase of Lumen's consumer fiber business and a $23 billion acquisition of EchoStar's spectrum licenses.

The deals are expected to close early this year and help AT&T lure customers from rivals with faster ⁠internet speeds and improved ‌mobile coverage, capitalizing on demand for broadband as remote work, streaming and connected devices drive data consumption higher.

The ‍company said 42% of fiber households have also signed up for its 5G mobile service, drawn by discounts for bundling the services.

AT&T said it expects 2028 ​free cash flow to be more than $21 billion, compared with analysts' ‌estimate for $19.61 billion, according to data compiled by LSEG.

Texas-based AT&T added 283,000 fiber customers in the fourth quarter, above 272,320 expected by analysts at Visible Alpha.

Starting first quarter, AT&T will reorganize its reporting into three segments, with the new advanced connectivity segment covering domestic 5G and ⁠fiber services that accounted for roughly ​90% of 2025 revenue.

The other two segments ​are legacy, which includes copper-based voice and data services, and Latin America, representing the company's Mexico wireless operations.

AT&T said ‍it expected adjusted profit ⁠to be between $2.25 and $2.35 per share in 2026, above estimates of $2.21, according to data compiled by LSEG.

The company added 421,000 net ⁠monthly bill-paying wireless phone subscribers in the fourth quarter, compared with 421,510 additions ‌expected by analysts from Visible Alpha.

(Reporting by Harshita Mary Varghese ‌in Bengaluru; Editing by Arun Koyyur)