AT&T boosts div­i­dend by 2.4 per­cent

The Pak Banker - - Company& -

NEW YORK: AT&T Inc., the largest U.S. phone com­pany, boosted its div­i­dend for the 27th con­sec­u­tive year and said it will buy back as many as 300 mil­lion shares as wire­less-cus­tomer gains help its cash flow.

AT&T raised its quar­terly div­i­dend 2.4 per­cent to 43 cents from 42 cents, rep­re­sent­ing a 6.5 per­cent yield on the car­rier's av­er­age share price this year. An­a­lysts in­clud­ing Piper Jaf­fray & Co.'s Chris Larsen and Credit Suisse Group AG's Jonathan Chap­lin, both based in New York, ex­pected 43 cents.

The car­rier said in a state­ment its board au­tho­rized a plan to re­pur­chase as many as 300 mil­lion shares, mark­ing the first buy­back an­nounce­ment in three years. At yes­ter­day's clos­ing price, the buy­back would cost about $8.77 bil­lion. The com­pany's mar­ket cap­i­tal­iza­tion is about $172 bil­lion.

AT&T, based in Dal­las, boosted rev­enue by $847 mil­lion last quar­ter from a year ear­lier to $31.6 bil­lion. Chief Ex­ec­u­tive Of­fi­cer Randall Stephen­son has at­tracted 6.1 mil­lion wire­less cus­tomers this year with de­vices such as Ap­ple Inc.'s iPhone.

"The an­nounced re­pur­chase au­tho­riza­tion has no ex­pi­ra­tion, which gives AT&T more flex­i­bil­ity" for other uses of cash, such as a spec­trum pur­chase, said Chap­lin in a note to­day. "We ex­pect AT&T to be in the mar­ket re­pur­chas­ing shares in due course, which should be a pos­i­tive for the stock." Credit Suisse's Chap­lin had pre­dicted a share re­pur­chase plan of as much as $12 bil­lion, while Piper Jaf­fray's Larsen said it would be be­tween $8 bil­lion and $10 bil­lion. AT&T in 2007 set out to buy back about 400 mil­lion shares by the end of 2009. It bought 164.2 mil­lion shares in 2008 for $6.1 bil­lion and 133,000 in 2009 for about $3 mil­lion, ac­cord­ing to com­pany state­ments. The car­rier gen­er­ated $11.6 bil­lion of free cash flow in the first three quar­ters, down 16 per­cent from a year ear­lier. -Bloomberg

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