AT&T hits 12-year low as Wireless chief warns of slower industry growth
An ugly day for the stock market was especially rough on $AT&T(T.US$, which slipped 4.4% on the day to seal its worst month in a year and a half - and reach its lowest point since the Global Financial Crisis, more than a decade ago.
That came as a presentation from Communications chief Jeff McElfresh raised new concerns about user growth in the wireless industry.
Speaking at a Wells Fargo conference, McElfresh worked to highlight momentum in mobility, saying over the past five quarters AT&T has delivered its best subscriber results in a decade (including nearly 4 million postpaid phone net additions, and 1.4 million fiber net adds).
"Total tonnage of EBITDA in the third quarter of '21 was a high-water mark for us," he says, noting Wireless raised its EBITDA by nearly 3.6%.
He added that the company's "three key elements" - simplified plans and targeted sub-segment approach, improved customer experience and network performance - are leading to lower churn and increased customer lifetime value.
He reiterated, though, that the outlook for 2022 and beyond doesn't assume a continuation of the outsized trends in net adds that we've seen.
"There's no doubt that the stimulus programs have put some extra cash in household budgets" this year, he says. "And so we're not expecting that level of activity to continue into 2022 and beyond. In fact, in a three-player market with the integration between Sprint and T-Mobile, we suspect the activity level for postpaid in 2022 is probably going to subside." AT&T does expect to take "more than our fair share," however, and he adds their guidance doesn't depend on outsized postpaid growth.
Expectations that average revenue per user on postpaid phones will stabilize next year means the company expects higher service revenues from the growing base, he says. Fewer than a quarter of gross adds and upgrades in Q3 traded in newer devices for premium promotional offers, and only about 20% of the company's postpaid smartphones are on Unlimited Elite, its highest-ARPU and fastest growing rate plan.
McElfresh's comments about dwindling industry user growth ahead did no favors for AT&T's wireless rivals today. $T-Mobile US(TMUS.US$fell 4.1% (again, also amid a marketwide sell-off), and $Verizon(VZ.US$fell 2.7%. $Dish Network(DISH.US$, set to become the fourth national player in wireless over time, tumbled 5.7% today.
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Hamish Maclaren : IT is just nuts even with just 1% growth the stock is dirt cheap. I won't yield or fold, NEVER. Now insiders should buy stock worth a couple of millions unless they are hiding something, makes no sense otherwise.
Sze How Ng : This is tax loss selling which got worse due to this down turn. If you are holding a winner with big gains and would like to sell it to protect from downside then you may want to sell $T to get tax loss.
Scottie Hatmaker : This looks like the chart of a corporation whose executives have decided on an organized bankruptcy to create new stock for their option packages.
Ford U : All these people in the comments talking about their cash flows. Lawl. Just wait until this incompetent management team announces another purchase of some PoS company for 40B at a 100PE only to turn around and sell it in 3 years for 8B. The managements of Telecoms see all that cash and feel the need to spend on trash to justify their job instead of optimizing their actual business, pay down debt, or send it back to shareholders. At 9% dividend rate they should be buying back stock by the truckload. The equity is by far their largest cost of capital.
Lloyd Ghiorso : dividend now is up to 9.11% !!!!!!
Squid Guy Lloyd Ghiorso: it lost 4% only today… good luck with that dividend
muchtime Lloyd Ghiorso: And price is now down to $22 !!!!
Rubyyo : Few companies have inflicted as much destruction on their shareholders as has AT&T. One of the worst stocks to own in the last decade.
How long before it falls to $15?
Twinkle_Boo : Insiders should step in and buy - applies to all 3 telecom stocks!
Unless they all seem to think the stock prices have more room to fall?!
GxAklulu Twinkle_Boo: _What Causes the Disposition Effect? Evidence from Corporate Insiders_, by Charles Favreau and Ryan Garvey