AT&T Warns Tariffs Could Raise Smartphone Prices, But Reaffirms 2025 Guidance

During the company’s first-quarter earnings call, CEO John Stankey stated that if tariffs increase the cost of phones, AT&T will likely pass those higher costs on to customers, just as it has in the past when handset prices rose.

AT&T (T) CEO John Stankey said on the company’s first-quarter earnings call that President Donald Trump’s new tariff policy has not yet affected its financial outlook. However, he warned that the tariffs could lead to higher smartphone prices for consumers in the coming months.

AT&T reported earnings per share of $0.51, narrowly missing estimates of $0.52, according to Koyfin. 

Revenue rose 2% from a year ago to $30.6 billion, slightly above the $30.4 billion forecast. 

Net income climbed to $4.7 billion, beating expectations of $3.6 billion and up from $3.8 billion a year earlier.

“The announced tariffs could potentially increase the cost of smartphones and other devices as well as the cost of network and technical equipment,” Stankey said during the call, noting that the impact would depend on vendor pricing strategies and shifts in consumer demand.

He explained that if tariffs make phones more expensive, AT&T will likely pass those higher costs on to customers, just like it has in the past when handset prices rose. 

Customers might respond by keeping their phones longer, and AT&T would adjust its support and pricing models to help manage that. While it’s not ideal for consumers, the company believes it can still protect its profits by adapting its approach, as it has done in the past.

Despite potential cost pressures, Stankey said AT&T can manage the risks within its existing 2025 financial guidance. He cited the 90-day pause on reciprocal tariffs and current supply chain visibility as key factors. 

Still, he noted that there has been a rise in consumer upgrades since the early April tariff announcement, which could represent a shift in demand timing.

For the full year, AT&T reaffirmed guidance of low-single-digit revenue growth, with mobility service revenue rising toward the upper end of its 2% to 3% range and fiber broadband revenue growing in the mid-teens. 

Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) is expected to grow at least 3%, with capital investment near $22 billion and free cash flow above $16 billion. 

Full-year EPS is forecasted to be between $1.97 and $2.07.

AT&T also reaffirmed that the sale of its 70% stake in DIRECTV to private equity firm TPG is on track to close by mid-2025, marking the company’s exit from the U.S. pay-TV market.

AT&T’s stock edged 0.7% higher in afternoon trade on Wednesday as the broader market recovered after President Donald Trump said he has “no intention” of firing Federal Reserve Chair Jerome Powell before his term expires next year.

The stock is up over 18% year-to-date and has gained more than 65% over the past 12 months.

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