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The telecom sector has continued its upward momentum, with the S&P Telecom Select Industry Index advancing 50.85% over the past year, reflecting robust investor confidence. The telecom industry’s upward momentum stands out compared to the S&P 500’s 17.35% gain over the past year.
The S&P Telecom Select Industry Index has also outperformed the broad market index month to date, advancing 9.52% compared with the S&P 500’s 2% gain.
The sector’s outlook remains positive, supported by optimistic AI growth forecasts and the Fed’s rate cut in 2025, with expectations of further easing adding to the upbeat sentiment. Below, we highlight the third-quarter results of two leading players, Verizon Communications Inc. (VZ - Free Report) and AT&T (T - Free Report) .
Earnings in Detail
Verizon Communications
On Oct. 29, Verizon Communications reported solid third-quarter 2025 results with industry-leading wireless service revenues of $21 billion, up 2.1% year over year. However, while adjusted earnings beat the Zacks Consensus Estimate, revenues missed the same. Verizon Communications has a Zacks Value Score of A but a Zacks Rank #4 (Sell).
On a GAAP basis, net income in the quarter was $5.06 billion or $1.17 per share compared with $3.41 billion or 78 cents per share in the prior-year quarter. The improvement was primarily attributable to top-line growth and lower operating expenses. Excluding non-recurring items, quarterly adjusted earnings were $1.21 per share compared with $1.19 in the prior-year quarter, beating the Zacks Consensus Estimate by 2 cents.
Quarterly total operating revenues improved 1.5% to $33.82 billion with growth in service revenues and higher wireless equipment revenues. The top line, however, missed the consensus estimate of $34.18 billion.
VZ registered solid broadband growth with total fixed wireless access net additions of 261,000, growing the subscriber base to nearly 5.4 million. The company remains well poised to achieve its target of 8 to 9 million fixed wireless access subscribers by 2028.
The company expects wireless service revenues to grow 2%-2.8% in 2025.
AT&T
On Oct. 22, AT&T reported modest third-quarter 2025 results with healthy mobility and broadband demand trends. However, both adjusted earnings and revenues missed the respective Zacks Consensus Estimate. AT&T has a Growth Score and a Value Score of A but a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
On a GAAP basis, AT&T reported a net income of $9.28 billion or $1.29 per share against a net loss of $0.23 billion or a loss of 3 cents per share in the year-ago quarter. The significant improvement was primarily attributable to a $5.5 billion gain from the sale of DIRECTV investments during the reported quarter and a $4.4 billion non-cash goodwill impairment charge in the year-earlier period.
Excluding non-recurring items, adjusted earnings remained flat at 54 cents per share. Adjusted earnings for the third quarter missed the Zacks Consensus Estimate by a penny.
Quarterly GAAP operating revenues increased 1.6% year over year to $30.71 billion. The top line missed the consensus mark of $30.96 billion.
AT&T witnessed solid subscriber momentum with 328,000 post-paid net additions. This included 405,000 postpaid wireless phone additions.
While optimizing operations, AT&T is aiming to increase efficiencies to lower operating costs while focusing on 5G and fiber-based connectivity, along with an expanded reach of software-based entertainment platforms. For 2025, AT&T expects wireless service revenues to improve 3% or more, while broadband revenues are anticipated to grow in the mid to high-teens.
ETFs in Focus
Below, we have highlighted a few exchange-traded funds (ETFs) for investors to gain exposure to the U.S. telecom industry.
Communication Services Select Sector SPDR Fund (XLC - Free Report)
Communication Services Select Sector SPDR Fund has 4.13% exposure to T and 4.2% to VZ.
Image: Bigstock
Telecom ETFs in Focus This Earnings Season
The telecom sector has continued its upward momentum, with the S&P Telecom Select Industry Index advancing 50.85% over the past year, reflecting robust investor confidence. The telecom industry’s upward momentum stands out compared to the S&P 500’s 17.35% gain over the past year.
The S&P Telecom Select Industry Index has also outperformed the broad market index month to date, advancing 9.52% compared with the S&P 500’s 2% gain.
The sector’s outlook remains positive, supported by optimistic AI growth forecasts and the Fed’s rate cut in 2025, with expectations of further easing adding to the upbeat sentiment. Below, we highlight the third-quarter results of two leading players, Verizon Communications Inc. (VZ - Free Report) and AT&T (T - Free Report) .
Earnings in Detail
Verizon Communications
On Oct. 29, Verizon Communications reported solid third-quarter 2025 results with industry-leading wireless service revenues of $21 billion, up 2.1% year over year. However, while adjusted earnings beat the Zacks Consensus Estimate, revenues missed the same. Verizon Communications has a Zacks Value Score of A but a Zacks Rank #4 (Sell).
On a GAAP basis, net income in the quarter was $5.06 billion or $1.17 per share compared with $3.41 billion or 78 cents per share in the prior-year quarter. The improvement was primarily attributable to top-line growth and lower operating expenses. Excluding non-recurring items, quarterly adjusted earnings were $1.21 per share compared with $1.19 in the prior-year quarter, beating the Zacks Consensus Estimate by 2 cents.
Quarterly total operating revenues improved 1.5% to $33.82 billion with growth in service revenues and higher wireless equipment revenues. The top line, however, missed the consensus estimate of $34.18 billion.
VZ registered solid broadband growth with total fixed wireless access net additions of 261,000, growing the subscriber base to nearly 5.4 million. The company remains well poised to achieve its target of 8 to 9 million fixed wireless access subscribers by 2028.
The company expects wireless service revenues to grow 2%-2.8% in 2025.
AT&T
On Oct. 22, AT&T reported modest third-quarter 2025 results with healthy mobility and broadband demand trends. However, both adjusted earnings and revenues missed the respective Zacks Consensus Estimate. AT&T has a Growth Score and a Value Score of A but a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
On a GAAP basis, AT&T reported a net income of $9.28 billion or $1.29 per share against a net loss of $0.23 billion or a loss of 3 cents per share in the year-ago quarter. The significant improvement was primarily attributable to a $5.5 billion gain from the sale of DIRECTV investments during the reported quarter and a $4.4 billion non-cash goodwill impairment charge in the year-earlier period.
Excluding non-recurring items, adjusted earnings remained flat at 54 cents per share. Adjusted earnings for the third quarter missed the Zacks Consensus Estimate by a penny.
Quarterly GAAP operating revenues increased 1.6% year over year to $30.71 billion. The top line missed the consensus mark of $30.96 billion.
AT&T witnessed solid subscriber momentum with 328,000 post-paid net additions. This included 405,000 postpaid wireless phone additions.
While optimizing operations, AT&T is aiming to increase efficiencies to lower operating costs while focusing on 5G and fiber-based connectivity, along with an expanded reach of software-based entertainment platforms. For 2025, AT&T expects wireless service revenues to improve 3% or more, while broadband revenues are anticipated to grow in the mid to high-teens.
ETFs in Focus
Below, we have highlighted a few exchange-traded funds (ETFs) for investors to gain exposure to the U.S. telecom industry.
Communication Services Select Sector SPDR Fund (XLC - Free Report)
Communication Services Select Sector SPDR Fund has 4.13% exposure to T and 4.2% to VZ.
Vanguard Communication Services ETF (VOX - Free Report)
Vanguard Communication Services ETF has 4.12% exposure to T and 3.85% to VZ.
Fidelity MSCI Communication Services Index ETF (FCOM - Free Report)
Fidelity MSCI Communication Services Index ETF has 4.13% exposure to T and 3.82% to VZ.
iShares Global Comm Services ETF (IXP - Free Report)
iShares Global Comm Services ETF has 3.62% exposure to T and 3.37% to VZ.
iShares U.S. Telecommunications ETF (IYZ - Free Report)
iShares U.S. Telecommunications ETF has about 11.59% exposure to T stock and 11.11% to VZ stock.