Earnings Preview: AT&T

AT&T (T) is expected to report Q3 earnings before market open Wednesday Oct. 22, with a conference call scheduled for 10:00 am ET.

Guidance

Analysts are looking for EPS of 71c on revenue of $31.32B. The consensus range is 69c to 75c for EPS, and $30.73B to $31.64B for revenue, according to First Call. The company will expect to see the effects of the second model of Apple's iPhone this quarter. The phone has most likely added customers to AT&T's wireless branch, however it has also raised the company's costs by subsidizing the phone's purchase price by hundreds of dollars each . AT&T has stated it expects the subsidies to cost 10c to 12c per share this year and the next.

Soleil upgraded the company's shares to Buy from Hold on September 22, as it believes investors will view AT&T as a safe harbor. The firm lowered the company's target to $38 from $41. However RBC Capital downgraded AT&T to Sector Perform from Outperform on October 8. The firm cited the challenging wireline environment and EPS dilution from wireless subsidies. The company's target was lowered by the firm to $32 from $45.