Investing.com -- AT&T Inc (NYSE:T) CEO John Stankey said the company expects to manage potential tariff-related cost increases without deviating from its 2025 financial outlook, though consumers may face higher prices for handsets and connected devices. Following successful Q1 results driven by beaten expectations for wireless subscriber additions in the first quarter, Staley spoke on the company's earnings call, in which he acknowledged uncertainty around new trade policies and their downstream effects.
On April 2, U.S. President Donald Trump levied reciprocal tariffs, establishing a 10% baseline duty on imports arriving from most countries, citing trade imbalances. Furthermore, higher individualized tariff rates (ranging from 11% to 50%) were designated for 57 specific countries deemed to have non-reciprocal practices, though these higher rates were temporarily paused for most nations (excluding China) shortly after the announcement. Since the levying of tariffs and the non-exclusion of China, the two countries have continually escalated a "trade war," creating market panic that hasn't been seen since the Covid-19 pandemic.
“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. He added that the impact will depend on how much suppliers pass through to AT&T and how consumers respond.
If handset prices spike due to tariffs, AT&T will likely need to support customers with new plans or incentives rather than altering subsidy levels. “Unfortunately for the customer, we're going to have to come up with some new ways for them to figure out how to digest that increase in pricing,” Stankey said.
He noted that device costs were already rising long before tariffs resurfaced as a macroeconomic threat and suggested that AT&T has a track record of navigating those pressures. “We've done a nice job of improving the profitability and performance... even though we've been seeing average cost of assets increasing over time.”
Stankey also contextualized smartphones as one part of a broader pattern in consumer spending. “If their flat panel TV and their laptop are going to be more expensive... we’re all going to learn,” he said, emphasizing that consumer preferences will evolve with pricing dynamics.
Despite the macro volatility, he reaffirmed AT&T’s full-year guidance and free cash flow targets, citing early execution strength and internal cost controls. Supported by solid Q1 results, he said the company remains on track to commence share repurchases in Q2.
Operational discipline beyond consumer wireline remains a focus, with cost improvements across call centers, IT, and digital acquisition channels. Stankey said these offer “additional uplift and the efficiency of how we bring customers into the business.”
“We’ve demonstrated we can get through that cycle,” Stankey concluded, signaling confidence that the business can absorb trade-related shocks without strategic disruption. As of 10:50 ET, AT&T stock was up 0.75% on strong Q1 results.
