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Wall Street Roundup

AT&T to repurchase more shares

December 12, 2007|From Times Wire Services

AT&T Inc. on Tuesday announced a share buyback program worth nearly $16 billion at the current stock price and its biggest dividend increase, sending shares of the largest U.S. phone company up as much as 7%.

The 13% boost to the dividend, to 40 cents a share from 35.5 cents, was bigger than expected and came with AT&T's forecast for long-term revenue growth in the mid-single-digit percentage range or better, also stronger than anticipated.

"The dividend and buyback will give the stock a lot of support if we do enter a recession," UBS analyst John Hodulik said. "They're just producing a lot of cash."

Chief Executive Randall Stephenson said at AT&T's annual meeting with analysts in New York that the company was seeing growth in its enterprise and wholesale segments, as well as wireless and video services.

The company forecast double-digit percentage growth in 2008 earnings per share, excluding certain items, and mid-teen percentage growth in revenue from its wireless business, including the newly acquired Dobson Communications Corp.

AT&T said it would complete the newly authorized buyback of 400 million shares by the end of 2009. Through Dec. 7, it had repurchased more than $13 billion of stock under a program announced last year.

Shares increased $1.56 to $39.46.

AT&T also said Tuesday that it was close to negotiating a new agreement with Yahoo Inc., its Web services partner, to include Internet and mobile advertising. The companies would share revenue from the promotions.

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