AT & T pledges to reduce its debt by $ 20 billion in 2019

By Sheila Dang

(Reuters) – AT & T Inc. (TN) announced Thursday its commitment to reduce its heavy debt next year through a variety of measures, including a review of all non-core assets, such as its stake in Hulu streaming video for sale possible.

At a meeting of analysts in New York, the second-largest US wireless phone company among its subscribers announced that it would repay between $ 18 billion and $ 20 billion of its debt. 39, here the end of 2019 and would generate up to 8 billion dollars in cash, partly through the sale. certain assets.

AT & T shares, which rose 1% after the presentation, have fallen 21% since the beginning of the year, investors worrying about its hefty debt – which s & # 39; Was $ 183 billion as of September 30 – following its acquisition of the Time Warner media company.

According to Refinitiv's IBES data, the company said it expects a free cash flow of 2019 from about 26 billion USD for 2019, higher than the average estimate of 24.84 billion USD from analysts.

AT & T said growth in free cash flow would help to reach its end-of-year adjusted net debt / EBITDA ratio of 2.5 times.

AT & T expects adjusted earnings per share for 2019 to rise below 10%, while analysts expect a 1.7% increase.

The company has also provided new details on a new streaming rival that is expected to be launched by the end of 2019 by WarnerMedia, the new segment that includes Turner networks and the premium HBO channel.

The new product will include three levels of service: a basic set for movies, a premium level with original programming, and the highest level will include content licensed from other providers.

AT & T hopes to attract a sufficient number of subscribers to offset the steady decline in the number of subscribers to the linear video of its satellite TV company DirecTV. The company said it expects a decline in the number of video subscribers in 2019, in line with the pace of the decline recorded in the third quarter of 2018.

AT & T has lost more subscribers to satellite TV than Wall Street had expected in the third quarter, which has lost 359,000 net subscribers, while viewers are turning to services such as Netflix ( NFLX.O) and Hulu.

(Report by Ankit Ajmera in Bengaluru, edited by Sriraj Kalluvila, Kenneth Li and Tom Brown)