AT&T’s CFO Apprises Shareholders of the Current Situation

Speaking at the Oppenheimer Virtual Technology, Internet & Communications Conference, AT&T Inc.’s T senior executive vice president and CFO, John Stephens, provided an update to shareholders. The Dallas, TX-based telecom and media giant aims to strengthen its balance sheet, while investing in key growth areas that includes broadband connectivity in fiber and 5G and software-based entertainment like HBO Max and AT&T TV.

Stephens stated that the company is committed to supporting dividend, which has increased for 36 straight years. For 2020, AT&T expects its dividend payout ratio to be in the 60s% range. The company has taken advantage of low borrowing costs to address upcoming debt maturities. It reduced the amount of debt maturing within the next four years by almost $23 billion. AT&T is also looking for asset monetization opportunities.

The company is benefiting from lower levels of wireless churn and growing adoption of Unlimited Elite wireless plans. AT&T is positioned to build upon its existing transformation initiatives. The recent reorganization of WarnerMedia will likely accelerate the businesses’ transition to meet evolving consumer needs. WarnerMedia plans to invest in content, expand its reach and operate its legacy businesses. That said, the uncertainty surrounding COVID-19 makes it difficult for the company to evaluate the recovery in operations such as advertising, theatrical releases and content production.

AT&T is offering access to 5G on its unlimited wireless plans for consumers and businesses. The company continues to invest in its wireless and wireline networks to expand coverage and improve connectivity. It connects more IoT devices than any other provider in North America. AT&T is focused on providing customers broadband through its fiber and mobile networks. The company is moving forward with its transformation plan, including operational efficiencies and cost savings.

AT&T’s shares have lost 11.5% in the past year against 9.3% growth of the industry. The company has a dividend yield of 6.9% compared with the industry’s 4.1%.

AT&T carries a Zacks Rank #3 (Hold), at present.

Some better-ranked stocks in the broader industry are Turtle Beach Corporation HEAR, Plantronics, Inc. PLT and Clearfield, Inc. CLFD, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Turtle Beach has a trailing four-quarter earnings surprise of 41%, on average.

Plantronics has a trailing four-quarter earnings surprise of 540%, on average. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters.

Clearfield has a trailing four-quarter earnings surprise of 45.6%, on average. The company’s earnings topped the consensus estimate in two of the last four quarters.

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