AT&T’s CFO Pascal Desroches recently addressed shareholders at the Oppenheimer 4th Annual 5G Summit, providing insights into the company’s strategic initiatives and growth projections. Emphasizing AT&T’s commitment to spearheading connectivity, Desroches highlighted the company’s progress and outlined key expectations for the coming years.
The company remains steadfast in its projection for 2023 full-year free cash flow, estimating it to reach approximately $16.5 billion. Desroches expressed confidence in AT&T’s capability to maintain this trajectory throughout 2023, with expectations of further improvement in 2024. The anticipated growth stems from profitable additions in wireless and fiber customer bases, augmented adjusted EBITDA, and a reduced capital investment expected to fall within the $21-22 billion range. However, this progress may be counterbalanced by reduced contributions from DIRECTV and increased cash taxes in 2024.
As part of its strategy to manage liabilities effectively, AT&T continues to prioritize reducing net debt and short-term financial obligations. Desroches reaffirmed the company’s commitment to achieving a net-debt to adjusted EBITDA leverage target of 2.5x by the first half of 2025. AT&T’s financial position remains strong, with sufficient cash reserves to cover forthcoming debt maturities, given that a significant portion of its debt is fixed at an average rate of 4.2 percent with an average maturity of 16 years.
The company anticipates that the 2024 adjusted earnings per share (EPS) will reflect accelerated depreciation due to its ambitious plans for commercial-scale deployment of the Open Radio Access Network (ORAN) in collaboration with Ericsson. This initiative reinforces AT&T’s commitment to lead in the nationwide implementation of ORAN technology in the United States.
Highlighting AT&T’s unique advantage in leveraging both wireless and fiber networks, Desroches underscored the company’s economic benefit in acquiring converged subscribers, setting it apart within the industry. The CFO reiterated the robust demand for connectivity, projecting sequential growth in fourth-quarter postpaid phone net additions, tracking around 500,000, and expecting approximately 250,000 fiber net additions, aligning with seasonal norms.
AT&T’s toolkit encompasses a variety of technologies, including 5G, fiber, and the AT&T Internet Air, a fixed wireless access (FWA) product available in parts of 34 locations. Desroches emphasized a cautious approach in deploying AT&T Internet Air, anticipating variations in FWA subscriber growth from quarter to quarter based on strategic considerations.
Desroches concluded by reaffirming AT&T’s commitment to fostering enduring relationships with high-quality 5G and fiber customers, leveraging its network infrastructure to drive sustainable growth in the ever-evolving landscape of connectivity services.
