AT&T -3.3% post-earnings; reactions to wireless numbers mixed

Though investors aren't thrilled with AT&T's (T -3.3%) Q1 wireless numbers, Wells Fargo (Outperform) calls them "big time solid." The firm notes net adds and churn were better-than-expected, and thinks Q1 results suggest the telco's 2014 guidance is "quite achievable."

Morgan Stanley (Equal-Weight) is less charitable: It estimates 500K of AT&T's 625K postpaid net adds came from tablets, and notes cheaper Mobile Share plans - launched following intense price competition and promotional efforts from T-Mobile (TMUS -3%) - led wireless service revenue growth to fall.

Canaccord observes strong uptake for Next upgrade plans boosted subscriber adds, but expects the trend to moderate. The firm has cut its 2014 EPS estimate to $2.69 from $2.78 (consensus is at $2.71).

On the CC (transcript), management talked up the ability of Next adoption to lower subsidy expenses, and mentioned U-verse revenue is now on a ~$14B/year run rate.

Strong U-verse growth has narrowed AT&T's wireline revenue declines, albeit while pressuring margins. The company promises wireline margins (-110 bps in Q1 to 10%) will improve in 2016.

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Comments (2)
  • slyolefox
    , contributor
    Comments (9) | Send Message
    I think that AT&T rebuilt T-Mobile with that cancellation fee incurred. Again, without Verizon and AT&T leasing line capacity, T-Mobile would be nothing. It
    harkens back to the days when MCI built itself on the back of AT&T, leasing prime routes between major cities.
    23 Apr 2014, 09:26 PM Reply Like
  • slyolefox
    , contributor
    Comments (9) | Send Message
    I am a retiree from AT&T and long on my investment with them.
    23 Apr 2014, 09:27 PM Reply Like
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