Thanks to the loss of AT&T's
AT&T is the country's largest telecom company, with about 86.2 million wireless customers and another 43.7 million landline users. The Dallas-based giant is expected to post EPS of 58 cents compared to a 59 cent EPS in the year-ago period. In terms of revenues, analysts are looking for a 1.9% increase from the year-ago period in which the company posted revenues of $30.65 billion. So while revenues are predicted to be up slightly, total earnings look likely to be flat, suggesting declining margins or additional charges and expenditures for the company [use the Stock Exposure Tool to find which ETFs hold your favorite stocks].
Beyond the headline number, investors will likely focus in on a few key metrics of the firm, which could signal where AT&T is headed in the future. First off, and arguably most importantly, is the net subscriber additions for the quarter. In the previous quarter, the company managed to add a net 2.8 million subscribers but a little over half of those were with low average revenue devices such as the Kindle and other e-readers. Now that Verizon has the iPhone, some are looking for this figure to shrink significantly, potentially dragging on the future growth predictions for the firm. "The iPhone has been propping up AT&T's results for nearly four years, so the loss of exclusivity is a monumental challenge for the company," wrote the AP in a recent story. Additionally, investors will likely hone in on any comments regarding the T-Mobile deal. The possible acquisition has already received some level of regulatory scrutiny and further news of the company's plans to integrate T-Mobile will likely be welcomed by investors [Best ETF Performers of 2010].
Thanks to this key earnings report, investors should look for the iShares Dow Jones U.S. Telecommunications Index Fund
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