AT&T CFO updates shareholders at Deutsche Bank conference
Pascal Desroches, CFO of AT&T Inc.* (NYSE:T), speaking at the Deutsche Bank Media, Internet & Telecom Conference today, where he provided an update to shareholders.
Desroches reiterated AT&T’s growth strategy – presented at the company’s Analyst and Investor Day on March 11 – for the standalone company following the upcoming closing of the WarnerMedia transaction. AT&T aims to be America’s premier broadband provider, underpinned by a world-class network built on fiber optics and integrated with wireless.
AT&T has announced that it expects the following:
- Drive mobile subscriber growth by maintaining its consistent go-to-market strategy, increasing penetration of underserved customer segments, and selling wireless services in its growing fiber footprint.
- Further optimize cost structure through ongoing transformation initiatives with opportunities to achieve an additional $2.5 billion in cumulative cost savings over the next two years toward the previously announced goal of $6 billion in ongoing cost savings by the end of 2023.
- Maintaining a total return-oriented capital allocation strategy focused on growth investments – with $24 billion in capital investments for 2022 and 2023 – and strengthening the balance sheet. 1 At the same time, AT&T will deliver returns to shareholders via an attractive dividend near the top of the Fortune 500.
Desroches not only reiterated the company’s 2022 guidance issued last Friday, but also discussed near-term business trends. As previously mentioned, the company expects to ramp up investments in 2022 to support fiber rollout and mid-band 5G spectrum deployment. These growth investments, combined with additional investments to support the ongoing rationalization of AT&T’s Business Wireline portfolio, are expected to result in a corresponding year-over-year increase in capital investments. Additionally, as noted during its analyst day, the company expects approximately $600 million of Adjusted EBITDA headwinds from its 3G disconnection costs and lack of CAF II credits weighted to the first half and specifically the first quarter 2022.2 As those headwinds ease, the company expects its Adjusted EBITDA course to improve over the course of the year. Desroches also said AT&T continued to see healthy trends in wireless sales in the first quarter after leading the industry in postpaid phone access in 2021. The company will report first quarter 2022 results on April 21, 2022.