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Jennifer Lynn is a proficient investor, executive and manager working with analytics data to drive smart business decisions. Technology, eCommerce, Management, Healthcare, Consulting, Strategy. Passionate for Finance, IT & Emerging Markets. Email: consultbydigital @
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  • AT&T's Q3 Earnings Miss, Competitive Pressure Is On The Rise

    The company lowers expected revenue forecast amidst stagnant growth and shifting market conditions.

    AT&T Inc. (NYSE:T) The second largest wireless telecommunications provider in the nation slightly missed its third quarter revenue estimates. With competitive pricing pressure to match smaller rivals such as Sprint (NYSE:S) and T-Mobile (NYSE:TMUS) clearly apparent, AT&T's latest earnings report has had some investors questioning whether or not AT&T will exceed revenue expectations.

    The company lowered its 2014 revenue growth forecast to 3 percent to 4 percent due to fewer-than-expected installment plan signups, down from a previous projection of about 5 percent growth.

    Investors should keep in mind that U.S. retail sales have been relatively weak. The volatility index has been at a higher level, one that is five times more since December 2012. With this index now rising close to 25.5, the stock market has been unpredictable across the board.

    Third quarter earnings fell to $3 billion, or 58 cents per share. Adjusting for one-time costs, earnings came to 63 cents per share, falling short of the 64 cents expected by analysts surveyed by Zacks Investment Research. AT&T's revenue rose 2 percent to $32.96 billion in the period, also below the $33.25 billion expected.

    The competition for price cuts continues. Despite third quarter failed earnings, AT&T's subscriber base remains quite strong. "Our prices have shifted on devices, allowing customers to make their own decisions. That's not pricing down," John Stephens, AT&T's chief financial officer stated to Bloomberg. The company's churn rate for postpaid accounts was less than 1 percent, its best-ever third quarter postpaid churn.

    "Through all this noise, our churn has gotten better." Churn, or the rate of monthly subscriber defections, was 0.99 percent, down from 1.07 percent in the second quarter.

    AT&T's rival Sprint has cut its prices aggressively in recent months. The company released a new family-plan offering customers 1 gigabyte of data for only $20 a month. AT&T did not slash prices in efforts to attract more customers, instead it added more value to its wireless plans, adding installment plans as an alternative.

    Continued, robust growth in connectivity demand, persistent security challenges, and continuing innovation in devices and services are among the trends facing the telecommunications industry in the coming year, according to Craig Wigginton, vice chairman and U.S. Telecommunications leader, Deloitte & Touche LLP.

    AT&T gained 2 million wireless subscribers in the third quarter. The most resulted from connected devices such as cars and tablets. Over 500,000 car data plans, 466,000 new and existing bring-your-own-device (BYOD) customers and 342,000 tablet customers were added. BYOD subscribers made up 7% of its smartphone gross adds resulting in more than four times an increase in the year-ago third quarter.

    Phones continue to remain the most important area for AT&T's business and strategy. The company expects to leverage revenues by having its customers adopt larger data plans. "Our strategy is on track and our investments in giving customers best-in-class service to access content everywhere and on any screen continue to pay off," Randall Stephenson, AT&T chairman and CEO said in a statement.

    AT&T's Mobile Share Value pricing model is expected to amount to two-thirds of its revenue by end of this year. These predictions are anticipated sometime in the fourth quarter or in 2015. The company strongly believes that this is a favored long-term investment and long-term plan for its customers.

    Growth of other devices and tablets will also be an opportunity for additional revenue. The wireless carrier is poised to benefit in offsetting increased competition and slowed growth. AT&T will capitalize in its newer areas such as home security and connected cars. Regulatory approval is also still pending for the $49 billion takeover of DirecTV (NASDAQ: DTV) and has been exploring expansion in Latin America.

    The deal for DirectTV has been touted as the only way the company can stay competitive by its leveraging bundled video and broadband services in the United States. AT&T also is focused on developing its video business. In the latest quarter, 216,000 subscribers were added to its U-verse television service.

    AT&T's future growth will be derived from its data plan usage.The company's significant customer base on discounted Mobile Share Value plans are expected to upgrade to Next. Approximately 20% of the company's smartphone base is on Next and 52% of smartphone subscribers are on the non-subsidy pricing.

    AT&T will have the opportunity of future revenues from 20 million potential Next customers from the upgrade. The option for larger plans and device insurance will drive such revenues.

    Third-quarter sales rose to $32.96 billion, the company said Wednesday in a statement, compared with the $33.21 billion average of analysts' estimate. AT&T closed Wednesday at $34.50, down $0.12 or 0.35%, on a volume of 19.5 million shares on the Nasdaq. In after hours, the stock dropped $0.49 or 1.42% at $34.01.

    For dividend investors its a great time to put AT&T on radar, a very wise choice. Dividend stocks are generally less volatile. The long term growth potential of dividends can result in approximately 40-50% of total return. With a 5.3 percent dividend yield, AT&T is one of the best dividends in terms of market dollar value.

    AT&T's stock may continue to be volatile, but will competition and revenues pave way to future success?

    Tags: T
    Jan 02 7:13 AM | Link | Comment!
  • Asian Stocks Mixed Following A Chinese Fuelled Rally

    The Asian markets resulted in a mix on Tuesday after a Chinese rate cut had heated up a rally which followed a previous trading session. China's market rally was spurred after borrowing costs were cut for the first time in more than two years.

    Hong Kong and Shanghai's stocks both rose, with the Topix index closing at its highest since June 2008. Japanese markets were led today by tire makers and insurers amid an optimistic outlook in which global central banks will support future growth.

    In Hong Kong, the Hang Seng Index was down at -2.70% and in Shanghai, the Shanghai Composite Stock Market Index down 28.36% from its August 2009 peak.

    The Dow 30 rose 0.04%, the S&P 500 index rose 0.03% yesterday, while the Nasdaq Composite index rose 0.89%.

    Monday's surge impacted the foreign exchange markets as the yen picked up following BoJ governor Haruhiko Kuroda's statement that policymakers were aware of the impact of its sharp decline on the world's number-three economy. Yuan weakness has reached multi-year lows against the dollar and euro ever since the stimulus programme by the central bank took in effect October 31.

    Chinese leadership has been targeting an economic growth of 7.5% this year. China's yuan fell as the rate cut was also seen as an indicator of weakness in the domestic economy. The yuan was at 6.14 against the U.S. dollar, against 6.12 late Friday in Asia.

    Oil prices in Asia stumbled as expectations were lowered after the outcome cut at this week's Organization of the Petroleum Exporting Countries meeting. The OPEC will hosts its most challenging and significant meetings in recent years on Thursday to address current falling oil prices.

    U.S. crude was down at $75.75 a barrel, while Brent fell close to 0.3 percent to $79.42 a barrel. The dollar let go of early modest gains against the yen, down close to 0.3 percent to 117.91 yen. The dollar moved away from its seven-year high of 118.98 on Thursday.

    Strategists at Barclays stated in a note that "The reduced leverage that OPEC now has over the oil market is likely to make it more cautious about cutting production."

    "The rapid growth being achieved in non-OPEC production means it faces the risk that even a large cut to supply may not be enough to support prices and could simply result in lost market share and revenue," they said.

    The Asian markets also impacted to Australia where the benchmark S&P/ASX 200 gained 1.1%. Australia's mining companies, came out as a leader following gains which ended after a two-week losing streak for the benchmark.

    Rio Tinto Ltd. gained 3.4%, BHP Billiton Ltd. was up 3.8% and Fortescue Metals Group Ltd. surged 10.1%, as investors anticipate more demand in commodities such as steel and iron following the Chinese monetary policy. China is Australia's largest trading partner within these areas.

    Gold markets were held steady below $1,202.80 an ounce on Tuesday. The markets retained its losses from the previous session. Investors have been monitoring the current developments in Switzerland's upcoming referendum on November 3, 2014 which will address a proposal of the central bank and its gold reserves. The vote is aimed to prevent the SNB from offloading its gold holdings.

    Chinese Stocks, along with several other Asian stock indexes, have had outstanding performance globally throughout the year. The Shanghai Composite is up close to 20% in 2014. The Chinese central bank cut has left investors an optimistic outlook to buy.

    Dec 08 8:21 AM | Link | Comment!
  • Is Disney Too Influential?

    Disney (NYSE:DIS) has proved itself as an influential company over recent years. Disney is even significant enough that it holds great consumer clout in relation to the global economy. There has been speculation Disney's strong results from it second quarter earnings report on Tuesday, August 5th were from the success of Marvel.

    "Our strategy of building strong brands and franchises continues to create great value across our company," said Robert A. Iger, chairman and CEO of The Walt Disney Company. " "We're extremely pleased with these results and we are also thrilled with the spectacular performance of Guardians of the Galaxy, which holds great promise as a new franchise for our company and once again reinforces the tremendous value of Marvel."

    Read more here...

    Tags: DIS
    Aug 20 12:05 PM | Link | Comment!
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