Speaking at the Credit Suisse Communications Conference, AT&T Inc.’s T senior executive vice president and chief financial officer (CFO), John Stephens, provided an update to shareholders. The Dallas, TX-based telecommunications company’s 5G network currently covers more than 160 million people in 327 markets. AT&T expects to reach a nationwide 5G coverage this summer.
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. Consumers in Atlanta, Baton Rouge, Nashville and Tallahassee, among others, now have access to the AT&T 5G network. Also, the company offers access to its 5G+ network, enabling super-fast speeds and responsive connections in parts of 35 cities.
Reportedly, AT&T’s wireless network covers more than 99% of America-based citizens and its fiber network is one of the largest in the country. The company connects more IoT devices than any other provider in North America. Stephens said that the company has exceeded 80% completion of its planned FirstNet build. At the end of first-quarter 2020, AT&T had 1.3 million FirstNet subscribers across more than 12,000 agencies. He added that the company is still evaluating the near- and long-term impacts of the coronavirus pandemic.
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. Despite coronavirus-induced challenges, the resiliency of AT&T’s wireless, broadband and enterprise businesses boosts its ability to generate strong cash flows to invest in key capital areas including 5G, fiber and HBO Max.
AT&T is likely to continue aligning its operations to the new customer demand model. This is to maintain its commitment to paying a dividend to shareholders and reduce debt. For 2020, the company expects the dividend payout ratio to be in the 60’s% range. Recently, the company issued $12.5 billion in near-term debt to refinance debt with 2020 and 2021 maturity dates, which gives it further financial flexibility.
AT&T invested more than $135 billion in its wireless and wireline networks over the past five years (2015-2019). The company will continue to expand its 5G coverage throughout this year, bringing the power of 5G to more customers.
Shares of AT&T have lost 22.2% compared with 9% decline of the industry in the past six months. AT&T has a dividend yield of 6.8% compared with 4.6% of the industry.
AT&T currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader industry are Turtle Beach Corporation HEAR, Ooma, Inc. OOMA and Acacia Communications, Inc. ACIA, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Turtle Beach has a trailing four-quarter positive earnings surprise of 46.4%, on average.
Ooma has a trailing four-quarter positive earnings surprise of 228.2%, on average.
Acacia has a trailing four-quarter positive earnings surprise of 17.7%, on average. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters.
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