What to Expect From Earnings: Verizon vs. AT&T

Please Note – This report has been updated to include Verizon’s earnings (see below).

AT&T Earnings for Wednesday

Thomson Reuters has AT&T’s consensus estimates of $0.64 in earnings per share and $33.26 billion in revenue. The third quarter from the previous year recorded earnings of $0.66 per share on $32.16 billion in revenue. Looking ahead to the fourth quarter, there are consensus estimates of $0.61 in earnings per share and revenue of $34.68 billion.

Merrill Lynch maintained a Neutral rating and $35 price target. According to the metrics that AT&T gave, the Next plan take rate should be around 50%, just above the Merrill Lynch estimate of 48%. The “bring your own device” plan looks to add 400,000, and at the same time this could put pressure on equipment revenues, but it would overall benefit the company’s margins. Merrill Lynch forecasts 4.1 million in Next device sales in the third quarter for 2014.

Credit Suisse maintained an Outperform rating with a $41 price target. The firm believes that the purpose of the AT&T investor and analyst day was to highlight the Digital Life connected-home plan and the Drive program. AT&T also outlined the complexity of developing these markets.

Shares on Monday traded up around 0.5% to $34.23.

AT&T shareholders are paid an incredible 5.4% dividend. The Oppenheimer price target for the stock is $42. The shares have a consensus analyst price target of $36.00 and a 52-week trading range of $31.74 to $37.48. AT&T has a market cap of $177 billion.

Verizon Earnings for Tuesday

UPDATE: Here is the full Verizon earnings summary and why it was a disappointment.

Thomson Reuters has consensus estimates for Verizon of $0.91 in earnings per share and $31.58 billion in revenue. The third quarter from the previous year recorded earnings of $0.77 per share and $30.28 billion in revenue. Looking ahead to the fourth quarter, there are consensus estimates of $0.85 in earnings per share and $32.27 billion in revenue.

Argus reiterated a Buy rating for Verizon with a price target of $59, based on it having a substantial lead over competitors in building out its advanced 4G LTE network and in providing fundamental network reliability.

We recently touted Verizon as one of the best defensive stocks to own for a market sell-off in the week prior to the most recent market correction. So how did it fare? Based on the closing prices going forward from when the market tanked on October 15, Verizon posted a gain each following day from the opening price to the close.

On Monday afternoon, Verizon shares were up by 0.7% at $48.41. They have a consensus analyst price target of $53.84 and a 52-week trading range of $45.45 to $53.66. Verizon has a market cap of $200 billion.

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