AT&T issues 2023 guidance as it sets up key Investor Day for Discovery deal
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AT&T (NYSE:T) has set a roadmap for growth following a media merger with Discovery (NASDAQ:DISCA) in comments released ahead of today's Investor Day presentations - including guidance toward free cash flow in the $20 billion range in 2023.
With the close of the deal (and the creation of Warner Bros. Discovery) approaching, they're "near the starting line of a new era for AT&T," CEO John Stankey says. And that means ramping up investment in 5G and fiber: âThe transformation weâve undergone over the past 18 months while delivering outstanding operational results has brought us to this point. We will be a simpler, more focused company with the intent to become Americaâs best broadband provider."
Along the way the company reiterated its guidance for 2022 and opened up guidance for 2023. This year, the company is expecting revenue growth in the low single digits from $118.2 billion (pro forma) in 2021 - driven by 3%-plus growth in wireless service, and 6%-plus growth in broadband revenues.
It sees 2022 EBITDA of $41 billion-$42 billion (up from $40.3 billion pro forma), benefiting not only from revenue growth but "incremental cost transformation savings" of about $1 billion. And earnings per share are forecast at $2.42-$2.46, vs. 2021's pro forma $2.41, with capital investment up to $24 billion range from $20.1 billion pro forma.
Looking to 2023, it sees "continued low single-digit revenue growth," with low single-digit growth in wireless service revenues and broadband revenues ramping to mid- to high single-digit range. Adjusted EBITDA is expected to come in at $43.5 billion-$44.5 billion (about $1.5 billion in additional cost transformation savings).
Earnings per share are forecast at $2.50-$2.60, with capital investment in the $24 billion range.
The company will use Investor Day to detail the strategy for pursuing free cash flow in the $20 billion range for 2023. It's revised its methodology for measuring free cash flow and expects the $16 billion range this year (pro forma) compared with $20 billion, reflecting $4 billion in expected vendor financing payments.
The stock is up 2.2% premarket. Discovery (DISCA) is up 1.3% premarket.
AT&T's Investor Day kicks off at 10 a.m. ET. The lineup for the day: