AT&T Announces 3-Year Financial Outlook, Reports Third-Quarter Financials
Monday, October 28, 2019 | Comments

AT&T announced its three-year financial outlook and capital allocation plan, along with quarterly financial results.

“The strategic investments we’ve made over the last several years have given us the essential elements to meet growing demand for content and connectivity,” said Randall Stephenson, AT&T chairman and CEO. “Our three-year plan delivers both substantial and consistent financial improvements over the next three years.”

The company also said that it expects Stephenson to remain CEO through at least 2020. The three-year financial guidance calls for 1% to 2% consolidated revenue growth per year and by 2022 and continued debt reduction.

The company said it will continue to actively review its portfolio, analyze the merits of each business and monetize noncore assets. In 2019, the company expects to close about $14 billion from monetizing non-core assets, and in 2020, it expects to monetize $5 billion to $10 billion of nonstrategic assets.

AT&T's consolidated revenues for the third quarter totaled $44.6 billion versus $45.7 billion in the year-ago quarter. Declines in revenues from legacy wireline services, WarnerMedia and domestic video were partially offset by growth in strategic and managed business services, domestic wireless services and IP broadband. Operating expenses were $36.7 billion versus $38.5 billion in the year-ago quarter.

Operating income was $7.9 billion versus $7.3 billion in the year-ago quarter due to lower expenses outpacing revenue declines, with operating income margin of 17.7% versus 15.9%.

Third-quarter net income attributable to AT&T was $3.7 billion versus $4.7 billion in the year-ago quarter. Cash from operating activities was $11.4 billion, and capital expenditures were $5.2 billion. Capital investment, which consists of capital expenditures plus cash payments for vendor financing, totaled $6 billion, which includes about $800 million of cash payments for vendor financing. Free cash flow, cash from operating activities minus capital expenditures, was $6.2 billion for the quarter.

Gross capital investment in 2020 is expected to be in the $20 billion range and excludes expected First Responder Network Authority (FirstNet) reimbursements in the $1 billion range and includes potential vendor financing.

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