Key Data Points:
- Cash from operations of $10.1 billion in 4Q16
- Free cash flow of $3.7 billion, up 19.2%
- Direct TV Now Net Additions 200,000
- Direct TV Adds 235,000
- Wireless Additions in the US 1.5 million.
To be quick, the key takeaways here are:
- AT&T seems to be executing better than Verizon which supports the TWX deal.
- Bond investors have to be sanguine with AT&T FCF generation which is strong and has accelerated (from up 10%) since the proposed TWX deal.
- While Direct TV Now subscribers pale in comparison to Netflix it looks like the service is doing OK and generating subscriber synergies.
- I suspect one reason for the good US wireless and Direct TV numbers is do to Direct TV now which is exposing consumers to the brand and then the Consumers are making choices based on the service offerings. Some are taking DTV-N and some are taking wireless services ect…..
The above are just points to consider and I am making no investment recommendation at this time, I do not have any positions in AT&T or TWX and I am short about 500 shares of Netflix. I am not monetizing thus I am not taking any revenue from Companies, Funds, Advertisers, or Investors.
Thanks for reading
Rich Tullo
Ten X Research 