AT&T projects free cash flow exceeding $18 billion by 2027, a projection announced Tuesday alongside a three-year strategic plan focused on expanding 5G and fiber services nationwide. The company's stock price increased by over 4% during the trading session, reaching its highest level since May 2021.
The wireless provider intends to double its fiber internet reach and improve its 5G network, providing customers with bundled discounts on high-speed fiber data and wireless phone services.
Based in Dallas, Texas, AT&T's initiatives are in line with industry trends favoring high-speed internet and have already resulted in substantial customer growth.
The company plans to return over $40 billion to shareholders in the next three years through dividends and share buybacks, with annual capital investments expected to remain around $22 billion during this timeframe.
"Our priority is to construct the largest, highest-capacity converged broadband network at the lowest marginal cost in the United States," stated CEO John Stankey during the Analyst and Investor Day presentation.
AT&T anticipates reaching over 50 million locations with fiber by 2029, having previously reported 28.3 million fiber passings, which indicates the number of potential customer locations accessible by its fiber network.
The introduction of unlimited plans, which include benefits such as increased hotspot data, has led to a higher-than-expected growth in wireless subscribers during the third quarter.
Analyst Jonathan Chaplin from New Street Research noted that AT&T's forecast and strategic direction indicate the company is maintaining its new trajectory, potentially at a quicker pace than previously expected.
The company has also raised the lower end of its 2024 adjusted earnings per share forecast to a range of $2.20 to $2.25, compared to analysts' expectations of $2.21 per share, based on data from LSEG.
Additionally, it has outlined growth projections for the years 2025 to 2027, excluding its 70% stake in DirecTV, which is set to be sold to TPG for $7.6 billion, with the transaction expected to finalize by mid-2025.
AT&T announced a free cash flow of $16.77 billion for the fiscal year that concluded in December 2023. The company is focused on phasing out its legacy copper network operations throughout most of its wireline presence by the end of 2029.