Multinational conglomerate AT&T (T) reported impressive second-quarter 2021 financial results, demonstrating the fourth straight quarter of customer growth in HBO Max, and fiber and wireless segments. The company offers technology, media and telecommunications services.
Adjusted earnings per share (EPS) increased 7.2% year-over-year to $0.89, beating the Street’s estimates of $0.79. Consolidated revenues climbed 7.6% year-over-year to $44 billion, surpassing analysts’ expectations of $42.62 billion.
Mobility revenues surged 10.4% to $18.9 billion; Consumer Wireline revenues rose nearly 3% to $3.1 billion; and WarnerMedia revenues were up 30.7% to $8.8 billion. Meanwhile, the revenues of Business Wireline declined 4% year-over-year to $6.1 billion.
The CEO at AT&T, John Stankey, said, “We’re raising our global HBO Max year-end forecast to 70 million to 73 million subscribers. Also, we’re updating full-year guidance for consolidated revenue, wireless service revenue, adjusted EPS and free cash flow.”
For 2021, AT&T expects consolidated revenues to grow in the 2% to 3% range and adjusted EPS to increase in the low- to mid-single digits. (See AT&T stock chart on TipRanks)
Last month, Redburn Partners analyst Stephen Malcolm initiated coverage on the stock with a Sell rating and a price target of $23 (18% downside potential). The analyst said, “The downside risks include still high total liabilities, downside risk to returns, opaque accounting and overly optimistic guidance.”
Overall, the stock has a Moderate Buy consensus based on 7 Buys, 4 Holds and 3 Sells. The average AT&T price target of $31.50 implies 12.5% upside potential. Shares have lost 6.3% over the past year.
According to TipRanks’ Smart Score rating system, AT&T scores an 8 out of 10, suggesting that the stock is likely to outperform market averages.
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