Full Breakdown
AT&T Beats Q3 Profit Estimates and Raises Guidance as SpaceX Looms as a New Competitor
By Drooid · · How we work
Core Event
AT&T Inc. posted third-quarter revenue of $32.3 billion, up 5.3% year-over-year, and adjusted earnings of 65 cents per share, surpassing the consensus estimate of 60 cents. The results lifted the company’s full-year earnings-per-share outlook to roughly $2.40. Despite the beat, the stock fell as much as 6.6% after Elon Musk reiterated plans for SpaceX’s Starlink Mobile to become a “major mobile carrier” in the United States.
Background & Context
SpaceX recently secured low-band spectrum and FCC approval for 15,000 satellites that can deliver mobile service directly to phones. Musk’s comments signal an intent to expand beyond satellite broadband into the consumer cellular market, positioning Starlink Mobile as a potential fourth U.S. wireless operator. AT&T has responded by bundling wireless and broadband services, raising plan prices twice this year, and offering subsidies on the new iPhone 18 Pro to curb churn.
Data & Statistics
- New internet and mobile subscribers: >1 million in Q3, the most in four years.
- Monthly mobile net additions: 379,000 (just below the 387,410 analyst target).
- Household convergence: 43% of home-internet customers also choose AT&T’s mobile service.
- Capital investment outlook: lowered long-term spending plans while raising profit guidance.
Official Statements & Responses
AT&T’s chief executive John Stankey highlighted the quality of combined-service customers and the difficulty of building a scaled, converged network:
- “These are high-quality customer relationships, and we continue to see growth in accounts that select AT&T for both their wireless and internet connectivity,” — Chief Executive Officer John Stankey
- “In terms of what it takes to build a scaled, converged network, which is what I believe everybody is marching into here, and what some of the new entrants are talking about needing to do, it takes a lot,” — Officer John Stankey, chief executive
Elon Musk emphasized SpaceX’s commitment to terrestrial network build-out to support Starlink Mobile:
- “We will be building out our terrestrial networks so there’s broad-based connectivity anywhere that SpaceX and Starlink are allowed to operate,” — Elon Musk
Analysts at Bloomberg Intelligence warned that uncertainty around SpaceX could pressure AT&T’s margins, while TD Cowen suggested AT&T’s diversification strategy may serve as a defensive play against the emerging threat.
Why It Matters
The earnings beat demonstrates that AT&T’s convergence model is delivering short-term financial strength, yet the market remains wary of a disruptive entrant with satellite-based coverage. If SpaceX successfully launches a nationwide mobile service, AT&T may need to increase spending on customer acquisition and network upgrades to preserve market share, potentially reshaping the competitive dynamics among the traditional “Big Three” carriers.