AT&T
The 10-day losing streak ends on Thursday morning after better-than-expected earnings were reported.
Investors sold AT&T stocks ahead of its third-quarter results, with the 10-day loss streak losing more than 7% in the report. It moved the stock closer to its lowest in almost a decade.
The results on Thursday morning indicate that the latest negativity has overdone. AT&T (Ticker: T) stock rose 5% at 12:41 p.m., down 0.1%
S&P 500.
But both AT&T bulls and bears will have plenty to point out in the report.
The telecom and entertainment organization reported expected earnings and strong-forecast earnings in the third quarter, despite the pain caused by the epidemic in its television and movie properties. AT&T’s networks performed well: the company delivered stronger wireless and Internet customer growth than a very optimistic analyst had predicted. But elsewhere shortages continue – think directive – and there is a huge demand for AT&T’s cash flow.
The company earned 76 cents per share in the third quarter, compared to analysts’ forecasts of c94 cents and 201 anal in the same period. He also had line૨..3 billion dollars in revenue compared to Wall Street’s .61..6 billion dollars, which was .6 .. 6 billion dollars down a year ago. Adjusted EBITDA, or earnings prior to interest, tax, depreciation and exemption, was ગઈ 13.2 billion, down from last year’s forecast of .7 13.7 billion and.
AT&T estimates that Covid-19-related effects have deducted 21 cents per share from its earnings, which would have been 3 cents more than a year ago. The biggest impact was felt on Warnermedia, where closed movie theaters, television production was disrupted, and delayed sports events hit revenue and profits. Sales fell 10% year-over-year to 7. 7.5 billion, while operating income fell 38% to 1. 1.8 billion.
HBO and HBO. Max – Extended streaming service launched in May – U.S. at the end of the third quarter. In it reached 38 million joint customers, while at its initial time about 34 million. It is ahead of the 36 million target set by AT&T for the end of the year, and in the direction of its forecast of 1 million million customers by 2025.
The AT&T wireless phone business remained the workhorse of the company’s portfolio. Operating operating profit fell 1% year on year. However, the revenue was 1.9 billion dollars, an increase of 1% over the year. The company added a massive 1.1 million postpaid subscribers – i.e. wireless subscribers who receive a monthly bill. The analyst’s estimate ranged from a gain of 100,000 customers to a loss of 353,000 customers. Prepaid subscribers have increased by 245,000, ahead of the forecast of 94,000.
AT&T Entertainment Group was the story of two trends in the third quarter. Satellite and cable TV subscribers continued to cancel with a loss of 590,000 DirectTV, U-Shlok and AT&T TV subscribers. The growth of broadband internet customers was strong, however, with people stuck at home upgrading their connection to work and entertainment. AT&T added its highest 357,000 Fiber subscribers in the last quarter, reducing slow-motion connections to add 158,000 total broadband net ads.
That didn’t happen because of the decline in directivity, and the entertainment group’s revenue was% 10.1 billion, down 10% from a year earlier, while operating revenue fell 28% to 800 800 million. Business Wireline announced surprising results, with revenue and operating income falling nearly 2.5% to 6. 6.3 billion and 1. 1.2 billion, respectively.
“It’s very hard to take a hole in this earnings report,” says Jim Booth, CIO of Brentview Investment Management, a dividend-growth investor. “Weak area, [DirecTV,] Also did better than expected. The wireless business was very strong, with over 1 million added. If anything, this earnings report shows the sustainability of dividends, which many investors are concerned about. “
On Thursday’s earnings call, CFO John Stephens emphasized AT&T’s commitment to its dividends, currently yielding 7.8% year-on-year. Management now expects to show at least 26 26 billion in free cash flow in 2020 – including. 8.3 billion in the third quarter and a dividend payout ratio in the high-50% range.
AT&T paid out 2.9 billion in debt in the quarter, and its net debt n-adjusted EBITDA increased nearly 2.7 times at the end of the third quarter.
Bernstein analyst Peter Supino wrote Thursday morning that “hemorrhage in media businesses, with dynamics stabilizing, offers little opportunity to worry about this weakness as weak competitive conditions and epidemiological turmoil put increasing strain on the company’s financial position.” “We believe that the stock price reflects a fairly uncertain outlook, and we are seeing dynamics as the competitive environment develops.”
Supino rates AT&T stock equivalent to Hold with a price target of $ 32.
Share of competitors
Verizon Communications
(WZ) and
T-Mobile US (TMUS)
Since the beginning of 2020, it has risen 4% and 43%, respectively, while AT&T has lost 27% since the dividend. This
S&P 500
8% returned.
Write to Nicholas Jacinsky at Nicholas.Jacinsky: barrens.com
.
