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AT&T Soared Due to iPhone Sales – July 23, 2010

AT&T Incorporated, the largest telecommunications company in the US, or T in the New York Stock Exchange topped the market’s earnings estimate due to the increased demand in iPhones. Thanks to its exclusive contract to sell the iPhone, the company was able to sell 3.2 million units of the phone and gained a net 496,000 contract subscribers. As a result, the company’s EPS upped the market’s $0.57 forecast with $0.61. Now, will AT&T be able to sustain its market share with the newly rolled out iPhone G4?

The company’s surprise upside in its second quarter earnings caused its stock to gap up. I’m even more bullish in the stock now since it also broke free from a double bottom pattern. Moreover, it was able to move above the 50-day and 200-day moving averages as well. An RSI of more than 50 likewise indicates that its upward momentum is gaining speed. Given yesterday’s price action, the stock could aim for its previous high just above $26.25. But if it weakens, the bottom of the gap or the neckline should still keep it afloat.

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