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Jon Keegan

AT&T beats on revenue, adds more wireless and fiber customers, will see big savings from tax bill

AT&T posted solid second-quarter earnings, beating estimates, and plans to use $6.5 billion to $8 billion in tax savings from President Trump’s tax bill to build out its fiber business. However, the stock is slumping in premarket trading, as the company’s full-year profit guidance failed to impress.

The company posted $30.8 billion in revenue, up 3.5% year on year, beating estimates of $30.4 billion on higher wireless and consumer sales. Adjusted earnings per share came in at $0.54, beating FactSet analysts’ expectations of $0.53.

Net income for Q2 was $4.9 billion, up from $3.9 billion from the same period in the year prior.

The company saw 401,000 postpaid phone net additions (new monthly subscriptions, minus lost customers) for the quarter.

Mobility service revenue was $16.9 billion, up 3.5% year on year, while consumer fiber broadband revenues were up 18.9% from Q2 2024 to $2.1 billion. The company added 243,000 new fiber subscribers.

AT&T Chairman and CEO John Stankey said in the earnings release:

“We are winning in a highly competitive marketplace, with the nation’s largest wireless and fiber networks.”

Guidance for the full year calls for adjusted earnings per share of between $1.97 and $2.07, and capital expenditures between $22 billion and $25 billion. That profit estimate may be the fly in the ointment here: even the high end of that range is below the consensus estimate of $2.09, per analysts polled by Bloomberg.

The company also said it’s expecting “low double-digit” declines in business wireless EBITDA.

The company said it expects to see $6.5 billion to $8 billion of cash tax savings between 2025 and 2027, thanks to Trump’s tax bill that was just signed into law. Of those savings, $3.5 billion will go into accelerating its fiber internet network, and the company expects to reach 60 million fiber customers when including the Lumen Technologies customers it agreed to acquire.

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Max Knoblauch

Carvana tumbles on report from short seller Gotham City Research

Used car retailer Carvana is down more than 12% on Wednesday, with shares on pace for their worst day since October.

A new report from short seller Gotham City Research, which had teased its publication in a post on X earlier in the day, appears to be dragging shares down. In the report, Gotham alleges Carvana’s 2023-24 earnings were overstated by more than $1 billion. (For perspective, Carvana’s earnings in those two years totaled just over $550 million.)

Gotham’s report also alleges that Carvana’s earnings are “far more dependent” on auto loan companies DriveTime and Bridgecrest than the market currently takes into account and that DriveTime’s subsidies fuel over 73% of Carvana’s earnings before interest and taxes. In its post teasing its findings, Gotham said Carvana would “age as one of the biggest Corporate Scandals of America over time.”

Per the report:

“We see problems with accounting, disclosure, and business practices that will lead to regulatory trouble. At best, we believe CVNA is far less profitable than believed, as a standalone business. At worst, CVNA is more like Tricolor, rather than Amazon. Either way, shares face massive downside risk to the share price.”

Carvana did not immediately respond to a request for comment.

Bottleneck

Wall Street thinks the next bottleneck in AI is chip equipment

Buying snarls in AI has so far led to big gains; analysts say semiconductor equipment stocks, known as semicaps, are where things will clog up next.

Matt Phillips7m
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Matt Phillips

Corning reports better-than-expected Q4 results

Glassmaker Corning, which saw its shares explode higher Tuesday after announcing an up to $6 billion deal to supply fiber-optic equipment for Meta AI data centers in coming years, issued its Q4 numbers before the start of trading Wednesday.

The company reported:

  • Non-GAAP core earnings per share of $0.72 vs. consensus expectations of $0.71 from analysts, according to FactSet.

  • Core sales of $4.41 billion vs. a $4.36 billion consensus estimate from analysts.

The company expects Q1 2026 core sales of $4.2 billion to $4.3 billion, compared to a consensus estimate of $4.26 billion from Wall Street, with core EPS between $0.66 and $0.70, the midpoint of which is a penny higher than the Street’s estimate of $0.67.

Investors traded the stock, which rose 16% on Tuesday after the Meta news, down 3.4% before markets opened. Through the end of Tuesday’s session, shares had nearly doubled over the last six months.

markets
Matt Phillips

GE Vernova, cornerstone of AI energy trade, dips after Q4 profit trails estimates

GE Vernova, which makes turbines used in power plants and has been a cornerstone in the AI power trade, is falling after posting a mixed bag of Q4 results on Wednesday morning.

  • Adjusted EBITDA of $1.16 billion fell short of the $1.25 billion estimate from analysts polled by Bloomberg, dragged down by a loss in its wind business.

  • Total revenue came in at $10.96 billion vs. the $10.21 billion consensus expectation from analysts polled by FactSet.

  • GE Vernova gave full-year 2026 sales guidance of between $44 billion and $45 billion vs. a consensus estimate of $42.13 billion.

  • New orders came in at $22.2 billion vs. expectations for $18.28 billion.

GE Vernova is up some 400% over the last two years, but the majority of those gains were booked by August 2025. Since then, the shares have been largely range-bound, and are down a bit after this morning’s report.

markets
J. Edward Moreno

Starbucks jumps after same-store sales beat estimates in Q1

Starbucks rose as much as 9% in premarket trading and continued to soar when the market opened on Wednesday after it reported financial results that beat Wall Street estimates on same-store sales for its fiscal Q1, with management projecting better-than-expected results for that key metric for the full fiscal year.

For the last three months of 2025, Starbucks reported:

  • $9.9 billion in revenue, higher than the $9.6 billion analysts were penciling in.

  • Same-store sales growth of 4%, significantly higher than the 2.3% analysts polled by FactSet had estimated. This marks the second consecutive quarter where that key metric was positive.

  • Adjusted earnings per share of $0.56, less than the $0.59 the Street was expecting.

The sales beat is a sign that CEO Brian Niccol’s turnaround plan, which includes ideas like the “bearista cup” and extending seasonal drink periods, may be moving the needle. “It is clear from our top-line results that our ‘Back to Starbucks’ plan is working and our turnaround is taking hold,” Niccol told analysts Wednesday morning.

Starbucks’ China business saw comparable-store sales grow by 7% after years of stagnant sales. The company said in November that it would sell a 60% stake in its China sector to Boyu Capital. “China was a standout,” Niccol said.

The company also shared its first financial outlook since suspending its forecast in October 2024. For its fiscal year ending in September, Starbucks guided for same-store sales to rise by at least 3%, more than the 2.83% growth that Wall Street was projecting. Management also expects annual adjusted earnings per share in a range of $2.15 to $2.40, compared to the $2.35 analysts were estimating.

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