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AT&T Inc. increased its long-term forecast for HBO and HBO Max subscribers Friday ahead of its planned investor day presentation.
The company now expects its HBO and the HBO Max streaming service to have 120 million to 150 million subscribers by the end of 2025, ahead of the company’s prior projection of 70 million to 90 million, which came in October 2019.
Shares of AT&T T, -1.50% are up 1.4% in premarket trading Friday.
AT&T also shared information about its wireless plans, including its intent to begin deploying some of its recently acquired C-band spectrum this year. The company expects it will start deploying the first 40 megahertz of spectrum by the end of 2021.
Read: Verizon spends $45 billion in major 5G spectrum auction, while AT&T spends $23 billion
The company projects that it will spend $6 billion to $8 billion in capital expenditures as it deploys this spectrum, with most of the spending coming from 2022 to 2024. “Expected C-band deployment costs are already included in the company’s 2021 capex guidance and in its leverage ratio target for 2024,” the company said in a press release.
AT&T also expects that its fiber business will be in 3 million new customer locations by the end of this year.
The company is targeting a ratio of net debt to adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) of 3.0 times, which AT&T says assumes an increase in net debt of roughly $6 billion to fund its recent spectrum purchases.
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AT&T aims to lower that debt ratio to 2.5 times during 2024 by using “all cash flows after total dividends to pay down debt” and looking for “opportunities to monetize non-strategic assets.” AT&T isn’t planning to repurchase stock while it moves to lower its debt ratio.
The company expects that it will “have the flexibility to meet its 2021 financial commitments” including dividend of almost $15 billion, spectrum payments of about $23 billion, gross capital investment of $21 billion and “continued repayment of debt.”
AT&T shares have lost 4.7% over the past three months as the S&P 500 SPX, +1.04% has risen 7.5%.
