AT&T Inc. (NYSE:T) today at its analyst conference in New York updated its 2008 and multiyear outlook and outlined its strategies for sustained double-digit growth in adjusted earnings per share driven by advances in wireless, broadband, enterprise, IP data and a new generation of converged services.
Randall Stephenson, AT&T chairman and CEO, said that AT&T will enter 2008 with solid operational momentum, having delivered 10 consecutive quarters of double-digit growth in adjusted earnings per share and five straight quarters of improved revenue growth. “Our premier set of assets is capable of generating continued strong results over the next several years,” said Stephenson.
“Over the past three years AT&T has executed a major transformation,” Stephenson said. “In wireless, we have achieved the most successful large-scale integration and significant operational improvements the industry has seen. We’re well on our way to delivering equally impressive results in our enterprise business. And we have initiatives under way across our operations to further advance our premier network capabilities, grow the business and deliver value to shareowners.
“AT&T’s time is now,” Stephenson said. “We have a great outlook for the coming years. We are a company that is able to do things today that wouldn’t have been possible just a year or two ago. Our unique set of assets and our investments in IP networks and wireless provide our customers with an unprecedented level of connectivity and mobility. The best news is we are just getting started. The velocity of change in this industry is stunning. Customer demand for bandwidth is growing at impressive levels. And no company is better positioned to take advantage of this growth than AT&T.”
Dividend Increase, New Share Repurchase Authorization
AT&T also announced today that its board of directors approved a 12.7 percent increase in the company’s quarterly dividend, the largest annual increase in the company’s history, from $0.355 a share to $0.40 a share on a quarterly basis and from $1.42 to $1.60 a share on an annualized basis.
This increase recognizes the company’s strong growth and positive outlook and follows a 6.8 percent dividend increase approved by AT&T’s board in December 2006, marking the company’s 24th consecutive year with an annual dividend increase.
The board also approved a new authorization for the repurchase of 400 million shares, which represents approximately 6.6 percent of AT&T’s shares outstanding as of Dec. 7, 2007. This replaces AT&T’s current repurchase authorization, under which the company had repurchased more than $13 billion of its shares through Dec. 7, 2007.
Based on current market conditions and the company’s outlook, AT&T expects to complete the repurchases available in the new authorization by the end of 2009.
The dividend will be payable on Feb. 1, 2008, to common shareowners of record on Jan. 10, 2008. The timing and nature of repurchases are subject to market conditions and applicable securities laws.
“These actions speak to the strength of our operations and our confidence looking ahead,” Stephenson said. “I am proud to say that we have increased our dividend every year in our company’s history, a record that is unmatched by any other major U.S. telecom company. With our operational and financial strength, we have the capacity to continue our record of returning substantial value to shareowners as we invest in the future of our business.”
AT&T reaffirmed and expanded its growth outlook for 2008. In the coming year, AT&T expects to deliver:
AT&T reaffirmed confidence that its ramping revenue growth combined with continuous cost improvements and share repurchases give it the ability to deliver sustained double-digit growth in adjusted earnings per share and strong growth in free cash flow in 2008 and on an ongoing basis.
With its strong operational assets and emerging opportunities, AT&T is confident in its ability to drive revenue growth in the mid-single-digit range or better over the coming years. The company expects to deliver revenue growth in every major revenue category over the next few years, and revenues from YELLOWPAGES.COM and content advertising are expected to exceed $1.5 billion by 2010, up from approximately $600 million in 2007.
AT&T also has substantial opportunities to reduce costs over the next few years, through previously identified merger synergies and through new operational initiatives in network operations, information technology and customer care. AT&T expects its annual operating-expense-savings run rate from AT&T Corp. and BellSouth merger synergies, and from operational initiatives to double over the next three years, growing from approximately $3.6 billion in 2007 to more than $7.0 billion in 2010.
AT&T also announced a major expansion of its AT&T-U-verse services to include the company’s Southeast region, with deployment now expected to reach approximately 30 million living units across 22 states by the end of 2010. AT&T expects that its U-verse services will represent a multibillion-dollar revenue stream by 2010.
Note: This AT&T release and other news announcements are available as part of an RSS feed at www.att.com/rss.
Note: AT&T’s analyst conference will be available for replay at www.att.com/investor.relations.
AT&T Inc. (NYSE:T) is a premier communications holding company. Its subsidiaries and affiliates, AT&T operating companies, are the providers of AT&T services in the United States and around the world. Among their offerings are the world's most advanced IP-based business communications services and the nation's leading wireless, high speed Internet access and voice services. In domestic markets, AT&T is known for the directory publishing and advertising sales leadership of its Yellow Pages and YELLOWPAGES.COM organizations, and the AT&T brand is licensed to innovators in such fields as communications equipment. As part of its three-screen integration strategy, AT&T is expanding its TV entertainment offerings. Additional information about AT&T Inc. and the products and services provided by AT&T subsidiaries and affiliates is available at www.att.com.
© 2007 AT&T Intellectual Property. All rights reserved. AT&T, the AT&T logo and all other marks contained herein are trademarks of AT&T Intellectual Property and/or AT&T affiliated companies. For more information, please review this announcement in the AT&T newsroom at http://www.att.com/newsroom.
Cautionary Language Concerning Forward-Looking Statements
Information set forth in this news release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results may differ materially. A discussion of factors that may affect future results is contained in AT&T's filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update or revise statements contained in this news release based on new information or otherwise. This news release may contain certain non-GAAP financial measures. Reconciliations between the non-GAAP financial measures and the GAAP financial measures are available on the company's Web site at www.att.com/investor.relations.
Note: AT&T's 2007 adjusted earnings exclude merger integration and noncash intangible amortization costs and other one-time items.