NEW YORK (TheStreet) -- AT&T (T - Get Report) has divulged details on its proposed acquisition of DirecTV (DTV) in a SEC filing Wednesday. The telecom said cost synergies will exceed $1.6 billion three years after closing, namely involving savings in programming costs, operational efficiencies and reductions in redundant broadcast infrastructure. Content costs currently account for 60% of subscriber video revenues.
"With the scale this transaction provides, we estimate AT&T's U-verse content costs after the completion of the transaction will be reduced by approximately 20% or more as compared with our forecasted standalone content costs," the company said in its 8-K filing.
In mid-May, AT&T confirmed its stock-and-cash deal for the satellite TV provider, an acquisition worth $95 a share, or just under $50 billion. Federal regulators have yet to approve the merger.
- T's revenue growth has slightly outpaced the industry average of 3.3%. Since the same quarter one year prior, revenues slightly increased by 3.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has slightly increased to $8,799.00 million or 7.31% when compared to the same quarter last year. In addition, AT&T INC has also modestly surpassed the industry average cash flow growth rate of 1.40%.
- The debt-to-equity ratio is somewhat low, currently at 0.88, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.42 is very weak and demonstrates a lack of ability to pay short-term obligations.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Diversified Telecommunication Services industry and the overall market on the basis of return on equity, AT&T INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full analysis from the report here: T Ratings Report