AT&T Reaffirms FY20 Guidance; Sees Adj. EPS $3.60-$3.70 vs $3.60 Est.

2020 Outlook5 AT&T reaffirms 2020 guidance: Revenue growth: of 1% to 2%; Adjusted EPS growth: $3.60 to $3.70, including HBO Max investment; Adjusted EBITDA margin7: Stable with 2019; Free cash flow in $28

Benzinga · 01/29/2020 11:52

2020 Outlook5

AT&T reaffirms 2020 guidance:

  • Revenue growth: of 1% to 2%;
  • Adjusted EPS growth: $3.60 to $3.70, including HBO Max investment;
  • Adjusted EBITDA margin7: Stable with 2019;
  • Free cash flow in $28 billion range;
  • Dividend payout ratio: In low ‘50s% range3;
  • Gross capital investment: In $20 billion range4;
  • Monetization of assets: net $5 billion to $10 billion

3-Year Financial Guidance and Capital Allocation Plan

  • Adjusted EPS growth5: $4.50 to $4.80 by 2022; includes HBO Max investment
  • Revenue growth every year: 1% to 2% three-year CAGR6
  • Adjusted EBITDA7 margin expansion: By 2022, 200 bps higher than 2019 levels; targeting 35% margins in 2022
  • Free cash flow: $30 billion - $32 billion in 2022
  • Dividend growth: Continued modest annual increases; dividends as % of free cash flow – less than 50% range3 in 2022
  • Capital allocation: 50% - 70% of free cash flow post-dividends for retiring ~70% of shares issued for Time Warner deal
  • Debt: Pay off 100% of acquisition debt from Time Warner deal; net-debt-to-adjusted EBITDA1 ratio of 2.0x to 2.25x in 2022
  • No major acquisitions