AT&T CEO on economy: There's stress in some consumer segments

The US economy is trying to dial into a dose of certainty.

"Our customers are still aggressively buying our products and services and paying their bills. But ... there's a degree of stress in some segments of the consumer space. Costs of certain products and services are getting higher, and that's putting some dynamics in place," AT&T CEO John Stankey told me at the Goldman Sachs Communacopia conference on Tuesday.

Stankey contributed some of the stress to uncertainty around Trump's tariffs. "I think the longer that's in flux and not maybe more known, it adds uncertainty, which could slow down economic growth. My sense is people are working as hard as they can to try to bring some degree of certainty with major trading partners, including China. Once that's known, then businesses feel good to invest."

Goldman Sachs chief economist Jan Hatzius told me at the conference on Monday the US economy is in "stall speed." JPMorgan (JPM) CEO Jamie Dimon in an interview Tuesday characterized the economy as weakening.NEW YORK, NEW YORK - SEPTEMBER 19: John Stankey, CEO, AT&T speaks at the Fast Company Innovation Festival at Convene on September 19, 2023 in New York City. (Photo by Eugene Gologursky/Getty Images for Fast Company)·Eugene Gologursky via Getty Images

AT&T's second quarter was well received for several reasons and had minimal signs of economic softness.

For starters, the performance stacked up well versus competitors T-Mobile (TMUS) and Verizon (VZ).

AT&T and T-Mobile had 410,000 and 1.7 million postpaid net additions in the second quarter, respectively.

Verizon revealed 51,000 wireless retail postpaid phone net losses in the quarter. Total postpaid churn — all people rolling off the service — rose to 1.24% from 1.11% a year ago.

"AT&T has emerged as the consensus best choice for investors in US telecom," said MoffettNathanson analyst Craig Moffett.

AT&T also called out a huge new profit tailwind from the One Big Beautiful Bill Act. The company expects to realize $6.5 billion to $8 billion of cash tax savings from 2025 to 2027.

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The company plans to invest $23 billion to $24 billion each year into its network, aided by tax benefits.

"AT&T investments in the network provides it with the largest fiber footprint (2030 estimate: 60 million homes passed, pro-forma for Lumen) and strong positioning to accommodate growth in network traffic over the coming years as a result of AI," Goldman Sachs analyst Michael Ng explained.

AT&T shares are up 30% year to date, outperforming the S&P 500's 10% advance.

Brian Sozzi is Yahoo Finance's Executive Editor and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email [email protected].

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