Desroches remarked that in the most recent quarters, AT&T’s mobility strategy of focusing on the long-term value of its high-value customer base has been successful in reversing previous subscriber losses. These gains, coupled with the ongoing opportunities to drive out costs through the transformation of the company’s distribution channels, gives
Desroches said that AT&T’s network is performing as well as it ever has and that as the company accelerates its deployment of C-band spectrum, it expects to cover 200 million people by the end of 2023, strengthening its ability to deliver even faster average speeds across the country and to densify its network as demand for 5G grows and the use cases for the technology expand. Desroches indicated that the company’s outlook includes expectations for continued elevated wireless competition and thus recent promotional activity by other wireless providers does not come as a material surprise.
Desroches also said the company’s plan to double the size of AT&Ts fiber footprint to about 30 million customer locations by year-end 2025 should open up new use cases and opportunities given the company’s integrated fiber deployment strategy and penetration trends in areas where fiber has already been deployed.
Desroches expects WarnerMedia’s second-quarter results to benefit from positive comparisons to the second quarter of 2020, which represented the worst of the pandemic impacts in that business unit. He also said that in the second half of the year, he expects WarnerMedia to benefit from improvements in advertising revenues, a return to theaters and run rate benefits from the second-half 2020 restructuring. He also expressed confidence in the upcoming planned international launch of HBO Max and in the company’s ability to deliver on its guidance of 67 to 70 million HBO Max customers by the end of 2021.
Desroches reiterated the guidance
Also during that time period, the company expects to increase capital investment to around
Desroches also reiterated that the company doesn’t expect to reset the current dividend until after the proposed WarnerMedia-Discovery transaction is approved and closed. After close of the transaction, he expects that the resized dividend will continue to deliver a very attractive yield in the 95th percentile of dividend yielding stocks.
1 Compound annual growth rate.
2 EBITDA is operating income before depreciation and amortization.
3 The company expects adjustments to 2021-2024 reported diluted EPS to include merger-related amortization (
4 Dividend payout ratio is total dividends paid divided by free cash flow. Free cash flow is a non-GAAP financial measure that is frequently used by investors and credit rating agencies to provide relevant and useful information. Free cash flow is cash from operating activities minus capital expenditures. Due to high variability and difficulty in predicting items that impact cash from operating activities and capital expenditures, the company is not able to provide a reconciliation between projected free cash flow and the most comparable GAAP metric without unreasonable effort.
5 Net Debt to Adjusted EBITDA ratios are non-GAAP financial measures that are frequently used by investors and credit rating agencies to provide relevant and useful information. AT&T’s Net Debt to Adjusted EBITDA ratio is calculated by dividing the Net Debt by the sum of the most recent four quarters Adjusted EBITDA. Adjusted EBITDA estimates depend on future levels of revenues and expenses which are not reasonably estimable at this time. Accordingly, we cannot provide a reconciliation between Adjusted EBITDA and the most comparable GAAP metric without unreasonable effort.
Cautionary Language Concerning Forward-Looking Statements
Information set forth in this news release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results might differ materially. A discussion of factors that may affect future results is contained in AT&T’s filings with the
This news release may contain certain non-GAAP financial measures. Reconciliations between the non-GAAP financial measures and the GAAP financial measures are available on the company’s website at https://investors.att.com.
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