Earnings Preview: AT&T

AT&T, Inc. (T) is scheduled to report its results on July 24, 2012, before the market opens. The street expects EPS and revenue of $0.63 and $31.75B, respectively.

In this article I will recap the historical results of the company, its latest EPS estimates vs. surprises, the latest news from T and the news from its closest competitors.

AT&T, Inc. Revenue and Net Income History

Recent EPS Actuals vs. Estimates

In the last quarter AT&T reported $0.60 EPS, beating analyst estimates of $0.57.

AT&T, Inc. EPS Historical Results vs Estimates

The consensus EPS estimate is $0.63 based on 31 analysts' estimates, up from $0.60 a year ago. Revenue estimates are $31.75B, up from $31.50B a year ago. The median target price by analysts for the stock is $35.00.

Average recommendation: Overweight

Source: Marketwatch

Analyst Upgrades and Downgrades

On May 14, 2012, Canaccord Genuity reiterated Buy rating for the company.
On April 25, 2012, FBR Capital reiterated Outperform rating for the company.
On March 28, 2012, Robert W. Baird downgraded the company from Outperform to Neutral.

Latest News

On July 13, 2012, AT&T Inc announced that it has reached an agreement with the International Brotherhood of Electrical Workers on a one-year contract extension covering nearly 7,000 core wireline employees.
On May 15, 2012, AT&T Inc's AT&T Government Solutions announced that it has been selected as a prime vendor under the Tactical Communications Equipment and Services (TacCom) contract.
On May 11, 2012, Reuters reported that AT&T Inc has held talks to buy Leap Wireless International, Inc. in recent months. These talks were serious enough for Leap Wireless to hire bankers to advise it on a potential deal.
On April 9, 2012, AT&T Inc announced that an affiliate of Cerberus Capital Management, L.P. (Cerberus) has agreed to acquire AT&T Advertising Solutions and AT&T Interactive.
On March 30, 2012, AT&T Inc announced that its Board of Directors declared a quarterly dividend of $0.44 a share on the company's common shares. The dividend is payable on May 1, 2012, to stockholders of record at the close of business on April 10, 2012.
On March 27, 2012, Kendall Law Group, a national securities firm led by a former federal judge with attorneys that include a former U.S. Attorney, is investigating AT&T Inc. The investigation concerns possible breaches of fiduciary duty and other violations of the law by certain officers and directors of the Company.
On February 21, 2012, AT&T Inc and American Medical Association announced that they have formed a strategic alliance that will enable hundreds of thousands of physicians, physician organizations and medical societies nationwide to connect and collaborate with hospitals, payers and patients to help enhance patient care and reduce costs.
On February 17, 2012, The Minnesota Timberwolves announced the renewal of a corporate sponsorship agreement with AT&T for the communications company to be the preferred wireless service provider of the Timberwolves.
On February 13, 2012, TiVo, Inc. announced it has entered into a licensing agreement with AT&T AdWorks LLC, a digital media company within AT&T, which will enable TiVo to improve elements of their research and advertising inventory offerings by incorporating anonymous and aggregate AT&T U-Verse(R) and TiVo households viewing data.
On February 2, 2012, AT&T Inc and France Telecom SA's Orange Business Services announced a new inter-provider connectivity agreement for a global telepresence service that expands the features and capabilities of video collaboration, allowing enterprises to schedule telepresence meetings and seamlessly connect telepresence endpoints.

Competitors

CenturyLink (CTL), Sprint Nextel (S), Telefonica (TEF), Vodafone (VOD), and Verizon Communications (VZ) are considered major competitors for AT&T and the table below provides the key metrics for these companies and the industry.

AT&T, Inc. key ratio comparison with direct competitors

The chart below compares the stock price changes as a percentage for the selected companies for the last one year period.

(click to enlarge)

T data by YCharts

Competitors' Latest Development

On July 16, 2012, Digital Realty Trust Inc and CenturyLink, Inc.'s Savvis Inc announced the completion of the joint venture acquisition of a 164,000-square-foot (15,236-square-meter) facility in Hong Kong.
On July 16, 2012, Reuters reported that Telefonica SA has mandated JP Morgan and UBS to organize the planned listing of its German O2 Unit. The initial public offering is set to take place later in the year 2012.
On July 12, 2012, Vodafone Group Plc announced that Vodafone New Zealand has entered into an agreement to acquire TelstraClear Limited, the New Zealand business of Telstra Corporation, for a cash consideration of NZD840 million (GBP430 million).
On July 12, 2012, Dow Jones reported that the Spanish divisions of Vodafone Group PLC and France Telecom SA won a case at the European Union's top court, which ruled that telecom companies needn't pay local government taxes for the construction of communications infrastructure if they don't own them.
On July 5, 2012, Verizon Communications Inc. announced that Hydro and Verizon have entered into an agreement under which Verizon will deliver a managed global wide area network with integrated security and remote access solutions, an integrated partner firewall to enable third-party access to select business solutions and full professional service support.
On July 5, 2012, Reuters reported that Telefonica SA announced a joint partnership between its digital unit and Abu Dhabi-based Etisalat that will expand Telefonica Digital's market by 17 countries and 170 million customers.
On July 4, 2012, Dow Jones reported that Vodafone Group Plc and Hutchison Whampoa Limited are in advanced talks to merge their network infrastructure in Ireland, The Financial Times reported.
On July 3, 2012, Dow Jones reported that European Union regulators have cleared Vodafone Group PLC's proposed acquisition of Cable & Wireless Worldwide PLC. The European Commission said the transaction would raise 'no competition concerns, as the parties' activities are largely complementary.
On July 2, 2012, Telefonica SA announced that in relation to the agreement reached in March 2012 with the Colombian government, as of June 29, 2012 the closing of the merger process between Telefonica Moviles Colombia SA and Colombia Telecomunicaciones SA ESP has taken place.
On July 2, 2012, Reuters reported that EU regulators are set to approve Vodafone Group Plc's GBP1 billion ($1.57 billion) bid for fixed-line network operator Cable & Wireless Worldwide without conditions.
On June 28, 2012, The Economic Times reported that Department of Telecom (DoT) is learnt to be in process of sending demand notice to five private operators for under reporting their revenues in two years.
On June 27, 2012, Reuters reported that Telefonica SA has lodged a USD 1 billion-plus complaint with a World Bank tribunal charging that Mexico's telecom regulator is making investment too costly.
On June 21, 2012, CenturyLink, Inc. announced that it has won a contract renewal worth $2.1 million over the next five years to provide telecommunications services to the U.S. Army base at Fort Stewart, Ga. The contract is for one year with four one-year options.
On June 20, 2012, Doro AB announced that it has signed a sales agreement with Hutchison Telecom International Ltd. and Vodafone Group Plc's joint venture, Vodafone Hutchison Australia, regarding 3G phone Doro PhoneEasy 615. The agreement makes Vodafone Doro's third distributor in Australia.
On June 20, 2012, Reuters reported that Moody's Investors Service has downgraded its long-term senior unsecured ratings and issuer ratings on Telefonica SA to Baa2 from Baa1.
On June 19, 2012, Birdstep Technology ASA announced that Sprint has selected its EasySmart client to provide intelligent data traffic management for Wi-Fi and WiMAX.
On June 19, 2012, Reuters reported that Sprint Nextel Corporation has entered into a $19 million settlement to resolve a lawsuit by U.S. customers who accused the money-losing mobile service provider of improperly charging them for using their cell phones to send pictures.
On June 18, 2012, Reuters reported that Vodafone Group Plc's GBP1.04 billion ($1.63 billion) offer for Cable & Wireless Worldwide looked certain to succeed on June 18, 2012 after the British fixed line operator's biggest shareholder dropped its opposition.
On June 15, 2012, CenturyLink, Inc. announced that its wholly-owned subsidiary, Qwest Corporation, agreed to sell $400 million aggregate principal amount of 7.00% Notes due 2052.
On June 14, 2012, CenturyLink, Inc. announced that it has won a $233 million task order to provide primary managed data networking services over the next five years to the Social Security Administration (SSA) under the Networx Universal contract.
On June 14, 2012, Dow Jones reported that Telefonica SA (Telefonica) will acquire a 6% stake in Promotora de Informaciones SA through the acquisition of convertible bonds in a total amount of EUR 100 million.
On June 13, 2012, Savvis, a CenturyLink company announced a strategic agreement with Hortonworks enabling Savvis to leverage Hadoop to offer cloud-based big data solutions for enterprises.
On June 13, 2012, Dow Jones reported that Telefonica SA (Telefonica) and Grupo Iusacell SA de CV (Iusacell) have teamed up in an infrastructure-sharing agreement with which the two hope to gain an edge in their ongoing competition with America Movil SAB de CV. Iusacell and Telefonica, which operates in Mexico under the Movistar brand, will maintain independent spectrum and commercial operations.
On June 12, 2012, Reuters reported that Telefonica SA is planning to establish a strategic alliance with Iusacell SA de CV to provide mobile telephony services in Mexico.
On June 11, 2012, Telefonica SA announced that the Company through its 100% subsidiary, Telefónica Internacional, S.A.U. (hereinafter Telefonica), and China United Network Communications Group Company Limited (Unicom Parent) through a 100% owned subsidiary, have signed a definitive agreement under which the latter will acquire 1,073,777,121 shares of China Unicom (Hong Kong) Limited (China Unicom), owned by Telefonica (equivalent to 4.56% of the share capital of China Unicom), at a price of HKD10.21 per share, for a total amount of HKD10,963.3 million, approximately EUR1,128.9 million at current exchange rates.
On June 8, 2012, Fitch Ratings announced that it has maintained its corporate ratings on Telefonica SA following the sovereign downgrade.
On June 8, 2012, Reuters reported that Fitch Ratings has revised the Outlook on Telefonica SA's Long-term Issuer Default Rating (IDR) to Negative from Stable and affirmed the IDR at BBB+.
On June 8, 2012, Following the Significant Event submitted by Telefonica SA on May 14, 2012, the Company announced that on June 1, 2012 the free allotment rights trading period for the paid-up capital increase ended.
On June 7, 2012, Telefonica S.A.'s Telefónica UK and Vodafone Group Plc's Vodafone UK announced their intention to strengthen their existing network partnership, by pooling the basic parts of their network infrastructure to create one national grid running each operator's independent spectrum.
On June 7, 2012, Verizon Communications Inc. announced that its Board of Directors declared a quarterly dividend of $0.50 per outstanding share, unchanged from the previous quarter.
On June 7, 2012, Vodafone Group Plc announced that Telefónica UK and Vodafone UK announced their intention to strengthen their existing network partnership, by pooling the basic parts of their network infrastructure to create one national grid running each operator's independent spectrum.
On June 6, 2012, Vodafone Group Plc announced that it has entered into discussions with Telstra Corp Ltd to explore a potential acquisition of Telstra's New Zealand subsidiary, TelstraClear.
On June 4, 2012, Reuters reported that Telstra Corp Ltd said it was in discussions about possibly selling TelstraClear, its struggling New Zealand (NZ) unit, to Vodafone New Zealand, but there was no certainty as to whether an agreement would be reached.
On June 4, 2012, Reuters reported that Verizon Communications Inc., is looking to cut its workforce by 1,700 people, or almost 1%, through a buyout offer for technicians and call-center employees.
On June 1, 2012, Reuters reported that Koninklijke KPN NV may sell its German mobile unit E-Plus in an attempt to fend off an unwanted $3.25 billion bid from Mexican tycoon Carlos Slim, who wants to buy a stake in the Company.
On June 1, 2012, Verizon Communications Inc. announced a definitive merger agreement under which Verizon will acquire Hughes Telematics, Inc. (HTI) for $12.00 per share in cash, or a total of $612 million.
On May 30, 2012, Telefonica SA announced that it is planning to distribute a dividend payment for fiscal year 2012 at a total value of EUR 1.50 per share, which will include a cash dividend of EUR 1.30 per share and a stock repurchase plan representing the remaining amount of EUR 0.20 per share, that will be executed before the end of May 2013.
On May 29, 2012, Sprint Nextel Corporation announced that it has entered into a new $1 billion credit facility with Deutsche Bank and a syndicate of other banks to finance equipment purchases from Ericsson for Network Vision.
On May 9, 2012, CenturyLink, Inc. announced that for the second quarter 2012 it expects, Operating Revenue to be in the range of $4.55 billion to $4.60 billion and adjusted diluted EPS to be $0.59 - $0.64. For fiscal 2012, it expects operating revenue to be in the range of $18.2 billion to $18.4 billion, adjusted diluted earnings per share (EPS) to be $2.35 - $2.55. According to I/B/E/S Estimates, analysts on an average were expecting the Company to report revenues of $4.58 billion and EPS of $0.59 for the second quarter of 2012; revenues of $18.3 billion and EPS of $2.38 for fiscal 2012.
On May 7, 2012, CenturyLink, Inc.'s Savvis announced that FXall has renewed its hosting and infrastructure services agreement with Savvis and will take additional data center space to accommodate client demand and ongoing market growth.
On May 4, 2012, Former United States Securities and Exchange Commission attorney Willie Briscoe, founder of The Briscoe Law Firm, PLLC, and the securities litigation firm of Powers Taylor, LLP announced that the firms are investigating legal claims against the officers and Board of Directors of Sprint Nextel Corporation ("Sprint") for possible breaches of fiduciary duties and other violations of state and federal law relating to a complaint issued by the New York Attorney General seeking over $300 million in damages.
On April 26, 2012, Glancy Binkow & Goldberg LLP announced that it is investigating potential claims on behalf of the shareholders of Sprint Nextel Corporation ("Sprint" or the "Company") concerning possible breaches of fiduciary duties by the Company or its fiduciaries.
On April 21, 2012, Faruqi & Faruqi, LLP, a national securities law firm, announced that is investigating potential securities fraud at Sprint Nextel Corporation. The investigation focuses on whether Sprint and its executives violated federal securities laws by failing to disclose that Sprint knowingly evaded New York state taxes.
On April 19, 2012, Reuters reported that the state of New York sued Sprint Nextel Corporation for more than $300 million, accusing the Company of tax fraud by deliberately not collecting or paying millions of dollars of taxes for its cell phone service.

Technical Overview

The stock has a market capitalization of $210.01B and is currently trading at $35.82 with a 52 week range of $27.29 - $36.21. The stock's year-to-date performance has been 23.39%. It is currently trading above 20, 50 and 200 SMA. It has been trading in an uptrend since December 2011.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Earnings Preview: AT&T

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