(Updated - October 28, 2019 6:54 AM EDT)

AT&T (NYSE: T) reported Q3 EPS of $0.94, $0.01 better than the analyst estimate of $0.93. Revenue for the quarter came in at $44.59 billion versus the consensus estimate of $45 billion.

“The strategic investments we’ve made over the last several years have given us the essential elements to meet growing demand for content and connectivity,” said Randall Stephenson, AT&T chairman and CEO. “Our 3-year plan delivers both substantial and consistent financial improvements over the next 3 years. We grow revenues, EBITDA and EPS every single year, and free cash flow is stable next year, but then grows in both of the next two years, as well. And all of this is inclusive of our investment in HBO Max.”

GUIDANCE:

AT&T sees FY2020 EPS of $3.60-$3.70 vs $3.62 expected.

• Revenue growth: of 1% to 2%;
• Adjusted EPS growth: $3.60 to $3.70, including HBO Max investment;
• Adjusted EBITDA margin: Stable with 2019;
• Free cash flow: Stable in $28 billion range;
• Dividend payout ratio: In low 50s% range4;
• Gross capital investment: In $20 billion range6;
• Monetization of assets: $5 billion to $10 billion

Adjusted EPS1 growth: $4.50 to $4.80 by 2022; includes HBO Max investment

3-Year Capital Allocation Plan

The company’s capital allocation plan for the next 3 years includes:

• Dividend Growth & Payout Ratio: Continued modest annual dividend growth; dividends as percent of free cash flow of less than 50% in 2022;
• Share Retirement: 50-70% of post-dividend free cash flow being used to retire about 70% of the shares issued for the Time Warner deal;
• Debt Reduction: Retiring 100% of the acquisition debt from the Time Warner deal; a net-debt-to-adjusted EBITDA ratio between 2.0x and 2.25x by 2022;
• Portfolio Review: Continued disciplined review of portfolio; no major acquisitions.

“The objectives we have outlined today have been central to our plans for many months, even before we closed our acquisition of Time Warner. But, as you would expect, our thinking has also benefited from our engagement with our owners, including Elliott Management,” said Stephenson. “I’ve found our engagement with Elliott to be constructive and helpful, and I look forward to continuing those conservations. These are smart people who very much appreciate the opportunity we have to create tremendous shareholder value.”

For earnings history and earnings-related data on AT&T (T) click here.