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Speaking at the Citi Global TMT West Virtual Conference, AT&T Inc.’s T senior executive vice president and CFO, John Stephens, provided a business update to shareholders. He stated that AT&T’s investments in network, along with an attractive wireless device pricing for customers, should continue to lend momentum to the wireless business.
The company anticipates activations of HBO Max to continue increasing, supported by the introduction of a hybrid distribution model for the Warner Bros. 2021 slate of movies along with the new distribution deals with Comcast’s CMCSA Xfinity and Roku ROKU. Notably, the release of Wonder Woman 1984 on HBO Max contributed to high subscriber engagement over the holiday season.
AT&T also expects to have financial flexibility in 2021 to invest in growth areas that include broadband connectivity in fiber and 5G and software-based entertainment like HBO Max and AT&T TV. It aims to sustain the dividend at current levels and reduce its debt. AT&T currently has a dividend yield of 7.1%. As of Sep 30, 2020, it had $152,980 million of long-term debt.
Stephens reiterated that the company expects to generate free cash flow of $26 billion in 2021, with a gross capital investment of $21 billion. AT&T continues to look for non-core assets monetization opportunities to drive shareholder value. It has refinanced more than $60 billion of debt at historically low rates.
AT&T is scheduled to report fourth-quarter 2020 results on Jan 27, before the opening bell. At that time, the company will provide its financial outlook and capital allocation guidance for 2021.
Shares of AT&T have lost 25% in the past year compared with 0.4% decline of the industry.
The stock currently has a Zacks Rank #4 (Sell).
A better-ranked stock in the broader industry is Corning GLW, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Corning delivered a trailing four-quarter positive earnings surprise of 40.7%, on average.
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AT&T Inc. (T) : Free Stock Analysis Report
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