Telecom Earnings Reveal a Sector That Finally Looks Healthier

Summary

Three telecom giants reported Q2 earnings over three days, and now that the market has had time to digest, a theme is emerging in the sector. One positive trend from the trio of reports last week is that telecommunications companies are no longer paying up for growth through promotions or subsidization. All three companies grew earnings per share (EPS) year over year (YOY) in Q2, indicating stronger retention economics and subscriber growth. Additionally, all three increased shareholder returns through buybacks and dividends, a signal to the market that management thinks it's sitting on a cheap stock. To choose a winner from Q2, we’ll need to break down the earnings reports in greater detail. Despite earnings, subscriber, and cash flow growth, not every stock responded the same way after its release. The sector as a whole might be its healthiest in years, but not every carrier is capturing upside in the same way. AT&T: Q2 Metrics Show Convergence Thesis Unlocking New Growth OpportunitiesAT&T MarketRank™ Stock AnalysisOverall MarketRank™100th Percentile Analyst RatingModerate Buy Upside/Downside21.3% Upside Short Interest LevelHealthy Dividend StrengthStrong News Sentiment0.77 Insider TradingN/A Proj. Earnings Growth9.48% See Full AnalysisShares of AT&T Inc. NYSE: T popped more than 3% following its July 22 earnings release, driven by rapid growth and low churn as its services converge. In its Q2 2026 results, the company reported a clear EPS beat and a slight revenue miss, but the underlying numbers are the true driver of the reaction. AT&T added 432,000 postpaid phone subscribers and 646,000 internet subscribers, with more than 147,000 being new accounts, not just extra lines. Home internet service is a key area, with revenue growing 27% year-over-year (YOY), and management expects fiber internet to reach more than 40 million households by the end of the year. Another bullish beacon is the impressively low churn rates in Q2 despite carrier price increases. Postpaid...