Summary:
AT&T has announced its anticipation of earnings growth over the next three years, driven primarily by the momentum of 5G and fiber services. The company also expects to generate significant shareholder returns through dividends and stock buybacks, totaling more than $40 billion by the end of 2026.
Introduction:
In a statement released on Tuesday, AT&T CEO John Stankey highlighted the company's achievements over the past four years, including durable and profitable subscriber growth, attractive returns on network investment, and strengthened balance sheets. This context sets up the main points of the announcement: earnings growth projections for 2024 to 2026, expansion of fiber broadband services, exit from legacy copper network operations, modernization of the 5G wireless network, and shareholder return expectations.
AT&T's Earnings Growth Projections:
In a move that is expected to boost investor confidence, AT&T has announced earnings growth projections for 2024, 2025, and 2026. The company now anticipates adjusted earnings per share in the range of $2.20 to $2.25 for 2024, surpassing its prior outlook of $2.15 to $2.25 per share. This projection reflects an increase from analysts' expectations of full-year earnings at $2.21 per share.
The company's growth momentum is expected to continue beyond 2024, with adjusted earnings per share anticipated to grow in the range of $1.97 to $2.07 for 2025 and accelerating into double-digit percentage growth by 2027. This growth trajectory is a testament to AT&T's successful strategy in harnessing the potential of emerging technologies like 5G and fiber services.
Expansion of Fiber Broadband Services:
AT&T has announced its ambition to expand its fiber broadband network to more than 50 million locations by the end of 2029. This significant investment is expected to not only drive growth but also improve customer experience through enhanced connectivity options.
In line with this expansion plan, AT&T is actively working towards exiting its legacy copper network operations across the majority of its wireline footprint by the end of 2029. This strategic decision is aimed at modernizing its network infrastructure and streamlining operations for better efficiency.
Modernization of the 5G Wireless Network:
The company has also announced plans to complete the modernization of its 5G wireless network using open technology by 2027, with deep mid-band 5G spectrum covering more than 300 million people. This upgraded network is expected to support super-fast download speeds and serve as a platform for innovation in new products and technologies like GenAI.
Shareholder Return Expectations:
In addition to its growth projections, AT&T has announced plans to support shareholder returns through dividends and stock buybacks. The company expects to generate more than $40 billion of shareholder returns by the end of 2026, including an initial $10 billion stock repurchase that is expected to be completed by the end of 2026.
This commitment to shareholders underscores AT&T's confidence in its future prospects and demonstrates a proactive approach towards rewarding investors for their support.
Conclusion:
In conclusion, AT&T's announcement provides clear evidence of the company's optimism about its growth trajectory over the next three years. The emphasis on 5G and fiber services as drivers of this growth underscores the strategic importance these technologies hold in the telecommunications sector.
The commitment to shareholder returns through dividends and stock buybacks further solidifies AT&T's position as a forward-thinking company that values its relationship with investors. As we look towards the future, it will be essential to monitor AT&T's progress against these projections and assess how effectively the company leverages emerging technologies like 5G and GenAI to drive growth and innovation.