AT&T (T) Stock Turns Red on Weak Financial Outlook

AT&T Inc. (NYSE:T) history dates back to 1876 when renowned scientist Alexander Graham Bell invented the telephone. In 1885, Bell co-founded the American Telephone and Telegraph Company, or AT&T, which built most of the telephone networks across the U.S. In the late 1990s, the company split into three separate firms, one of which kept the AT&T name.

The Dallas, Texas-based company stepped into new territories over the years to boost its revenue. For instance, it acquired satellite television provider DirecTV in 2014. A few years later, it purchased Time Warner Inc. to further strengthen its foothold in the entertainment industry.

However, the telecommunications and media giant suffered significant losses during 2020 due to the negative effects of the Covid-19. Its share price fell to a low of around $27 in March after the company postponed its $4 billion stock repurchase program due to the pandemic. Overall, the stock lost around 28 percent of its value during the 12 months ended December 31.

AT&T on Wednesday announced better than expected financial results for the fourth quarter amid better postpaid phone additions and higher subscriptions for HBO Max. Although the company swung to a loss of $1.95 per share in the quarter, its adjusted profit of 75 cents per share came in above the analysts’ average estimate of 73 cents per share.

Revenue for the quarter slipped 2.4 percent on a year-over-year basis to $45.69 billion but surpassed the consensus forecast of $42.34 billion.

The company added 800,000 new postpaid phone customers in the quarter, well above 475,300 additions projected by analysts. The higher additions were mainly driven by the launch of 5G-enabled iPhone models during the quarter.

Moreover, total subscriptions for both HBO and HBO Max reached 41.5 million in the fourth quarter, as compared to 38 million in the prior quarter.

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Looking forward, the company projected revenue growth of around 1 percent for 2021 and adjusted profit relative to 2020. The weak guidance sent AT&T stock down 2.05 percent on Wednesday.