Reference no: EM132873362

AT&T reported its 4th quarter and full-year earnings on 1/27/2021. The company said revenue came in at $45.7 billion, versus analysts' $44.5 billion forecasts and $46.8 billion a year ago. AT&T's adjusted earnings before interest, taxes, depreciation, and amortization fell 10% to $12.9 billion, short of the $13.3 billion consensus estimate. The company reported 75 cents in adjusted earnings per share, which excludes the write-down and other one-time costs, including a pension adjustment and merger-related amortization expense. AT&T estimates that Covid-19-related impacts subtracted a further 8 cents per share from earnings last quarter. Excluding adjustments, AT&T lost $1.95 per share in the fourth quarter due to the write-down of its DirecTV business by $15.5 billion. AT&T weighs the potential sale of its pay-TV assets, and executives focus their investments on newer technologies. Going forward, AT&T offered guidance that calls for little to no growth in sales and earnings in 2021-likely much softer than many investors had been hoping for.

Question 1: In your opinion, what was AT&T's overall performance during 2020? Does this performance surprise you? Support your answer. Refer to the graphic entitled Segment operating revenue (please find the WSJ article under the reading assignment). How do the components of this graph further explain the overall company results? Last October. Hedge fund Elliott Management Corp criticized AT&T's longtime CEO's acquisition strategy and called on the company to shed some assets. The investor, which has tangled with Samsung Electronics Co. and the Argentine government, also suggested that AT&T name new directors to its board. Based on the results reported by AT&T, are you convinced that AT&T has a solid strategy in the long run compared to its competitors? Justify your answer.