AT&T INC. 8-K

What Happened

• AT&T announced it closed the acquisition of substantially all of Lumen Technologies’ mass‑markets fiber business on February 2, 2026; the fiber assets and customer relationships were placed in a wholly owned subsidiary, Forged Fiber 37 Services, LLC (Forged Fiber), which AT&T intends to sell a controlling interest in to an equity partner, and therefore Forged Fiber is presented as discontinued operations.
• In the 8‑K AT&T reported Q1 2026 continuing‑operations results: income from continuing operations of $4.2 billion, or $0.54 per diluted share; operating revenues of $31.5 billion (up 2.9% year‑over‑year); operating income of $6.7 billion and an operating margin of 21.1%. Cash from operating activities (continuing ops) was $7.6 billion (down $1.5 billion vs. Q1 2025). Capital expenditures were $4.9 billion ($5.1 billion including $0.2 billion of vendor financing).

Key Details

• Acquisition closed: February 2, 2026; acquired mass‑markets fiber placed in Forged Fiber and classified as held‑for‑sale / discontinued operations.
• Q1 2026 results: Continuing‑ops EPS $0.54; revenues $31.5B (+2.9%); operating income $6.7B; operating margin 21.1%. Q1 2025 continuing‑ops EPS was $0.61.
• Segment update & growth: AT&T realigned reporting to Advanced Connectivity, Legacy and Latin America. Advanced Connectivity revenues were $28.5B (+4.7%); fiber revenues +21.2%. Net adds Q1 2026: +158k retail wireless (294k postpaid phone), +292k fiber, +292k fixed wireless; total internet connections 14.8M (vs. 11.4M year‑ago).
• Capital return: repurchased $2.3B of stock in Q1 under the 2024 Authorization; Board approved an additional $10B repurchase in Jan 2026 and $13.5B remained available at March 31, 2026.

Why It Matters

• The Lumen mass‑markets fiber acquisition expands AT&T’s fiber customer base and network footprint, but AT&T plans to monetize much of that investment by selling a controlling stake in Forged Fiber; the assets are accounted for as discontinued operations, so ongoing results exclude them.
• Q1 results show growth concentrated in Advanced Connectivity (5G, fiber and fixed wireless) with improving operating margins, signaling progress in the company’s shift away from copper‑based legacy services (Legacy revenue fell 25% year‑over‑year as decommissioning continues).
• Investors should note stronger revenue mix and subscriber/net‑adds trends in fiber and wireless, a meaningful buyback program, but lower operating cash flow versus prior year (partly due to prior‑year DIRECTV distributions).