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AT&T (T) CFO Updates Shareholders, Expects Growth to Continue

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AT&T Inc.’s (T - Free Report) senior executive vice president and chief financial officer, Pascal Desroches, provided an update to shareholders at the Oppenheimer Technology, Internet & Communications Conference.

Desroches stated that AT&T continues to execute in its core market areas of 5G, fiber and HBO Max. The company continues to invest in its network and create fascinating content. For 2021, AT&T expects gross capital investment to be about $22 billion including capital expenditures of $17 billion.

In the wireless business, robust demand for mobile services coupled with AT&T’s go-to-market strategy will enable the company to maintain postpaid subscriber growth in the second half of 2021. Communications service providers aim to capitalize on healthy demand in the highly competitive wireless industry.

AT&T has been reorganizing its portfolio to better focus on its connectivity businesses. The company recently completed its DIRECTV transaction with TPG Capital. It is moving forward with its plans to spin or split off WarnerMedia and combine it with Discovery to create a new entertainment company, Warner Bros. Discovery.

This strategy is expected to unlock the value of AT&T’s assets and match the video and entertainment businesses with the right capital structure and partners. After completion of the transaction, which is anticipated in mid-2022, AT&T expects to significantly reduce debt and increase investment in 5G and fiber.

AT&T currently covers 250 million people in the United States with 5G using sub-6 MHz spectrum across 500 markets. It plans to begin C-Band deployment by the end of this year and expects to cover almost 200 million points-of-presence with C-Band by the end of 2023.

AT&T reported strong second-quarter 2021 results with solid subscriber growth backed by a resilient business model and robust cash flow position. The company has revised guidance for 2021 to better reflect the improving market conditions.

While optimizing operations, it is aiming to increase efficiencies to lower operating costs, while focusing on 5G and fiber-based connectivity along with expanded reach of software-based entertainment platforms. The company is also aiming to reduce its debt burden by monetizing non-core assets.

AT&T’s shares have lost 6.9% in the past year compared with the industry’s decline of 0.8%.

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The stock currently has a Zacks Rank #3 (Hold).

A couple of better-ranked stocks in the broader industry are Clearfield, Inc. (CLFD - Free Report) and InterDigital, Inc. (IDCC - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Clearfield delivered a trailing four-quarter earnings surprise of 49%, on average.

InterDigital pulled off a trailing four-quarter earnings surprise of 536%, on average.

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