An Early Preview of Tuesday's AT&T Earnings

Next Tuesday, AT&T (NYSE: T  ) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to have an uninformed, knee-jerk reaction that turns out to be exactly the wrong move.

AT&T has transformed itself countless times, going from the revolutionary technology that its nationwide landline network once represented to the voice and data wireless network that has enabled an entire category of mobile devices to rise to near-ubiquity across the nation. But given new competitive threats, is AT&T prepared to deal with its next challenge? Let's take an early look at what's been happening with AT&T over the past quarter and what we're likely to see in its quarterly report.

Stats on AT&T

Analyst EPS Estimate

$0.64

Change From Year-Ago EPS

6.7%

Revenue Estimate

$31.75 billion

Change From Year-Ago Revenue

(0.2%)

Earnings Beats in Past 4 Quarters

3

Source: Yahoo! Finance.

Will AT&T connect with investors this quarter?
Recently, analysts have kept their views on AT&T's earnings almost unchanged, cutting earnings-per-share estimates for the full 2013 year by just a penny. The stock, though, hasn't been flat at all, gaining more than 11% gain since mid-January.

The big news for AT&T over the past quarter has been the continuing trend toward consolidation among its rivals. Sprint (NYSE: S  ) is now the subject of a bidding war between two potential acquirers, so its position in the domestic market will almost certainly increase in the near future as a capital infusion reinvigorates its business. Meanwhile, T-Mobile is now apparently poised to merge with MetroPCS. As a result, AT&T can no longer count on being part of an unchallenged U.S. duopoly.

Yet a potentially larger deal involving archrival Verizon (NYSE: VZ  ) might actually help AT&T achieve some of its broader strategic goals. A report earlier this month speculated that Verizon and AT&T might get together to buy out British telecom giant Vodafone (NASDAQ: VOD  ) . The massive transaction would involve Verizon taking full control of the Verizon Wireless joint venture, of which Vodafone currently owns 45%. For AT&T, the deal would give it Vodafone's international assets, which represent the company's best chances for growth, given its already dominant position within the U.S. market.

One interesting fight that AT&T is taking on is Google's (NASDAQ: GOOGL  ) fiber-Internet initiative. With Google expecting to build a gigabit fiber network in Austin, Texas, AT&T, which serves the city, has responded with its own gigabit fiber network plans. Neither network is likely to appear before next year, but what happens in Austin could define the future of high-speed Internet service across the country.

In AT&T's earnings report, be sure to compare the contributions that the iPhone and other popular mobile devices make toward its revenue with the figures that Verizon released earlier this week. As Sprint and T-Mobile seek to gain more prominence, AT&T will need to be sure to defend its market share against Verizon as much as possible.

Can Google invade AT&T's space as an Internet provider? It's more important than ever to understand each piece of Google's sprawling empire. In The Motley Fool's new premium research report on Google, we break down the risks and potential rewards for Google investors. Simply click here now to unlock your copy of this invaluable resource.

Click here to add AT&T to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2373112, ~/Articles/ArticleHandler.aspx, 8/22/2014 1:55:54 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement