AT&T Deals With Elliott. Now It Needs to Nail HBO Max.
The wireless giant provided some needed clarity on its strategy and finances, but its HBO Max unveiling will set the tone for the rest of the year.
a step in the right direction for AT&T.
Photographer: Christopher Dilts/BloombergAT&T Inc. is one of the world’s biggest communications companies, but it hasn’t always been great at communicating. On Monday, management sought to change that, providing investors with some of the clarity they’ve needed to get comfortable once again with an industry giant that’s so much more complex today that it was just a couple of years ago. It’s the right message. Now AT&T, the parent of the eponymous wireless network, as well as the DirecTV satellite service and media properties including HBO, needs to put its words into action.
Alongside the release of third-quarter earnings, AT&T outlined some of its most detailed financial projections and capital-return goals yet, promising to retire all of the debt it incurred to buy Time Warner last year and buy back about 70% of the shares it issued for the $102 billion deal. The company said profit margins, as measured by earnings before interest, taxes, depreciation and amortization, will be unchanged next year as it invests in HBO Max, its version of Netflix launching in the spring, but that margins will begin to grow in 2021 amid cost cuts and growth in its wireless and Mexican divisions. AT&T also committed to hit the pause button on major acquisitions and continue evaluating assets that can be carved out to raise money, such as the sale-leaseback agreement it struck for its wireless towers last week.