AT&T Confirms 2025 Targets, Cash Flow Strength And Debt Reduction Plan: Details

by Lekha Gupta Benzinga Editor

Zinger Key Points

AT&T reaffirms 2025 financial targets, expects FY25 EPS of $1.97-$2.07 and over $16B in free cash flow.
Plans to close DIRECTV sale by mid-2025, targeting $5.4B in after-tax proceeds and $50B in financial capacity.
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On Monday, AT&T Inc. T confirmed it is on track to meet its 2025 financial targets and execute its long-term strategic plan.

The company reiterated FY25 adjusted EPS guidance of $1.97 to $2.07 (vs. consensus of $2.04) and first-quarter adjusted EPS of around $0.48, or higher (vs. street view of $0.49).

This implies that the first quarter of 2025 adjusted EPS will be in line with or better than the prior year's first quarter, excluding DIRECTV.

AT&T maintains its full-year outlook of free cash flow of over $16 billion and sees around $2.8 billion or more for the first quarter. This aligns with or exceeds first-quarter 2024 levels, excluding DIRECTV.

Also, the company anticipates to receive cash payments of $1.4 to $1.5 billion from DIRECTV in first quarter as part of its agreement to sell its 70% stake in DIRECTV to TPG.

AT&T targets closing the transaction by mid-2025, generating total after-tax cash proceeds of $5.4 billion in 2025, along with $500 million in 2029.

In the first quarter, AT&T also secured over $850 million in cash proceeds from a structured real estate sale-leaseback with Reign Capital.

AT&T remains on track to achieve its net leverage target of net-debt-to-adjusted EBITDA in the 2.5x range by the first half of 2025 and intends to sustain this level through 2027.

This month, AT&T outlined its multi-year strategy to generate over $50 billion in financial capacity within the next three years, driven primarily by organic growth.

In January, the company reported fourth-quarter 2024 operating revenues of $32.30 billion, beating the analyst consensus estimate of $32.04 billion and adjusted EPS of $0.54 exceeded the estimate of $0.50.

Investors can gain exposure to the stock via iShares U.S. Telecommunications ETF IYZ and WBI Power Factor High Dividend ETF WBIY.

Price Action: T shares are down 0.95% at $27.02 premarket at the last check Tuesday.

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