AT&T Projects Profit Growth & $20 Billion Share Buyback Through 2027

AT&T Inc. (NYSE: T) has projected consistent profit growth over the next three years, with significant gains anticipated by 2027 due to investments in its wireless and fiber-optic networks. For 2025, the telecom giant expects adjusted earnings per share (EPS) between $1.97 and $2.07. The company predicts that profit growth will accelerate to double-digit percentages by 2027.

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As part of its strategy to refocus on core telecom operations, AT&T plans to complete the sale of its DirecTV business by mid-2025. This move comes as AT&T shifts away from its past media expansion efforts and concentrates on reducing debt and streamlining its business.

In addition to its profit forecasts, AT&T announced a $20 billion share buyback program, which is expected to be completed by 2027. The company also plans to maintain its annual cash dividend of $1.11 per share, aiming to return over $40 billion to shareholders through dividends and stock repurchases over the next three years.

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CEO John Stankey highlighted the company's transformation since he took over leadership in 2020, when AT&T was burdened with debt from media acquisitions. Since then, Stankey has overseen the divestment of Warner Bros. in 2022 and the sale of its DirecTV stake earlier this year, refocusing the company on growing its 5G wireless and fiber-optic services while strengthening its financial position.

“With this strategic approach, we are embarking on a new era of sustained growth for AT&T,” said Stankey.

Strong Performance and Capital Investments

AT&T's stock rose 3.5% in premarket trading following the announcement, continuing a strong upward trend. Year-to-date, the stock has climbed 35%, positioning it for its best annual growth since 2019, when it posted a 37% increase.

Over the next three years, AT&T plans to allocate $22 billion annually for capital spending to support its network expansion and growth. The company aims to extend its fiber-optic services to over 50 million locations by 2029, up from the 28 million locations it currently serves. Free cash flow is projected to hit $16 billion in 2025, with an expected increase of $1 billion annually in the following years.

For the year 2024, AT&T anticipates adjusted EPS in the range of $2.20 to $2.25, which includes a 30-cent contribution from DirecTV. Without this contribution, earnings are expected to reach up to $1.95 per share.

Positive Third-Quarter Results

The announcement follows a strong third quarter for AT&T, during which the company added 403,000 new monthly wireless service subscribers. Although revenue fell short of analyst expectations, the company's profit of 60 cents per share exceeded Wall Street forecasts, demonstrating AT&T’s ability to generate solid earnings and navigate market challenges.

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