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What Happened?
Shares of telecommunications conglomerate AT&T (NYSE:T) jumped 3.4% in the morning session after the company reported mixed second-quarter results where profits surpassed Wall Street estimates, but revenue came in slightly below expectations.
For the quarter, AT&T's GAAP earnings per share came in at $0.66, which was 11.2% higher than the consensus analyst forecast of $0.59. Revenue grew 2.3% year on year to $31.56 billion, narrowly missing the $31.75 billion analysts had anticipated.
A key positive from the report was improved profitability, as the company's operating margin increased to 23.3% from 21.1% in the same period last year. This suggested better operational efficiency, which likely resonated positively with investors despite the slight revenue shortfall.
After the initial pop, the shares cooled down to $22.85, up 2.6% from the previous close.
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What Is The Market Telling Us
AT&T’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock gained 5.6% on the news that the company reported fourth-quarter 2025 results that surpassed Wall Street's expectations. The company posted revenue of $33.47 billion, marking a 3.6% increase from the previous year and beating analyst estimates.
AT&T also reported a GAAP profit of $0.53 per share, which was significantly ahead of the consensus forecast of $0.46. The stronger-than-expected performance in both sales and profitability appeared to drive positive investor sentiment, despite some underlying concerns noted in its report, such as a year-over-year decline in its free cash flow margin.
AT&T is down 7% since the beginning of the year, and at $22.85 per share, it is trading 22.9% below its 52-week high of $29.62 from September 2025. Investors who bought $1,000 worth of AT&T’s shares 5 years ago would now be looking at only $815.64.
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