AT&T And Verizon: No More New Highs

Telecom & Wireless

Published: May 3, 2007 4:51 am

AT&T (T) is very near its 52-week high of just over $40. That puts it up 50% over the last 12 months. Verizon (VZ) is right there as well, just below its 52-week high of $40. Same high, but that may be the end of it. Verizon’s shares are up 20% over the last year.

But, as Barron’s points out:

Craig Moffett, an analyst with Bernstein Research, says the company’s unit growth numbers were "spectacular," especially high-speed data and VoIP. He noted that weakness at the topline reflect a whiff on advertising – ad revenues were 24% below his forecast. The same thing happened to Comcast (CMCSA).

Moffett notes that net additions of broadband customers were up 18% for Time Warner; Comcast had reported 10% growth. But he notes that DSL providers are not doing well: net addition growth in the quarter was down 23% at Verizon (VZ), 12% at at AT&T (T) and 16% at Qwest (Q). Says Moffett: "Cable is, to be blunt, winning the broadband wars."

Fiber-to-the-home is being built by AT&T and Verizon, but a large deployment is at least two years off.

And, that will be too late. Cable stocks may hit new highs, but the run is ending for big telecoms.

Douglas A. McIntyre

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