AT&T Outlines Strategy Pledging Over $40B in Buybacks, Dividends

An AT&T store in New York.

Bloomberg via Getty Images

KEY TAKEAWAYS

  • AT&T pledged to return more than $40 billion to shareholders via dividends and buybacks over the next three years, while forecasting more than $18 billion in free cash flow in 2027.
  • AT&T's plan also involves expanding its fiber network and modernizing the wireless business.
  • DirecTV deal still expected to close in mid-2025.

AT&T (T) outlined an ambitious strategic plan Tuesday, pledging to return more than $40 billion to shareholders via dividends and buybacks in the next three years, while forecasting more than $18 billion in free cash flow in 2027.

Shares of the telecom giant are rising about 3% in premarket trading after it laid out the three-year plan, which also included increases in its outlook for earnings, expanding its fiber network delivering broadband internet and modernizing its 5G wireless network. That expansion, it said, would drive the "more robust shareholder returns."

"Over the last four years, we've achieved durable and profitable subscriber growth, generated attractive returns on network investment, and strengthened our balance sheet," AT&T Chief Executive Officer (CEO) John Stankey said. “Our plan expands the country's largest fiber network to more than 50 million total locations, modernizes our wireless network and rewards our shareholders.”

AT&T Raised Lower End of 2024 Earnings Outlook

AT&T said free cash flow, excluding the funds raised from the sale of its remaining 70% stake in satellite provider DirecTV to private equity firm TPG (TPG), would exceed $16 billion in 2025 and surpass $18 billion in 2027. Under Stankey, the company has reduced its high debt levels and pivoted to focusing on the telecom business, by offloading DirecTV and spinning off its WarnerMedia business several years ago.

The company forecast 2024 adjusted earnings per share (EPS) of $2.20 to $2.25, including the funds raised from its DirecTV stake sale.That raises the lower end of the range from the previous $2.15 to $2.25 range.

It said it still expects the sale of its DirecTV stake to close in mid-2025.

AT&T share are up by more than a third this year.

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  1. PR Newswire. “AT&T Outlines Strategic Plan to Drive Sustainable Growth and Enhanced Shareholder Returns

  2. AT&T. “Corporate Governance.”

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