Telecom & Wireless

What to Look For in AT&T Earnings

courtesy of AT&T Inc.

AT&T Inc. (NYSE: T) is scheduled to report its fourth-quarter financial results after the markets close on Tuesday. The consensus estimates from Thomson Reuters are calling for $0.63 in earnings per share (EPS) on $42.75 billion in revenue. The same period from the previous year had $0.55 in EPS on revenue of $34.44 billion.

AT&T is the world’s largest provider of pay TV, with TV customers in the United States and 11 Latin American countries. In the United States, the AT&T wireless network has the nation’s self-described strongest 4G LTE signal and most reliable 4G LTE.

The company also helps businesses worldwide serve their customers better with mobility and highly secure cloud solutions. Trading at a very cheap 12.5 times estimated 2016 earnings, the company continues to expand its user base, and strong product introductions from smartphone vendors have not only driven traffic, but increased device financing plans.

This company posted very solid third-quarter numbers. AT&T reiterated 2015 guidance for double-digit revenue growth and continued consolidated margin expansion. Management expects capital spending to increase sequentially and they also estimate that free cash flow could be better than $4.5 billion. Third-quarter wireless subscriber additions came in higher than many Wall Street estimates, and DirecTV saw positive video additions where many expected losses.


A few analysts weighed in on AT&T prior to the earnings report:
  • Goldman Sachs has a Buy rating and a $37 price target.
  • Merrill Lynch reiterated a Buy rating.
  • S&P Equity reiterated a Buy rating with a $41 price target.

So far in 2016, AT&T has outperformed the market, with the stock up about 3.2% year to date. Over the past 52 weeks, the stock is up nearly 11%.

Shares of AT&T were trading up 0.3% at $35.13 on Tuesday, with a consensus analyst price target of $37.13 and a 52-week trading range of $30.97 to $36.45.

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