AT&T Earnings Around the Corner – Stay on the Lookout for These 3 Trends
AT&T (NYSE:T) is expected to report its Q1 2011 earnings on Apr 20. Here we provide a road-map for investors ahead of the call, highlighting key trends to watch. AT&T competes with Sprint (NYSE:S) and Verizon (NYSE:VZ) in the mobile and landline business.
Our price estimate for AT&T’s stock stands at $36.14, about 15-20% ahead of market price.
- How Will An Expanding Postpaid Phone Business Drive AT&T Stock’s Q1 Results?
- Down 50% From 2021, We Think There’s Upside For AT&T Stock
- Will AT&T Stock See Gains Post Q2 Results?
- At $15, AT&T Stock Appears Oversold
- AT&T Stock Held Up In A Tough Market. What Does 2023 Hold?
- What’s Happening With AT&T Stock?
Possible Slowdown in Net Subscriber Additions
AT&T has had some very good recent quarters in terms of subscriber additions. For example, in Q4 2010 the company added around 2.8 million net subscribers. However out of this, about 1.5 million were connected devices that have low ARPU (average monthly revenue per user). [1] The net wireless subscriber additions for Q3 2010 stood at a healthy 2.6 million. [2]
However, upcoming earnings might be slightly different as net subscriber additions could slow down a bit. The culprit? The iPhone is no longer exclusively with AT&T, a change that has two notable effects on the company. First, new subscribers that were previously drawn to AT&T because of the iPhone might opt for Verizon instead. Second, some existing AT&T customers might also defect in favor of Verizon.
Expect Continued Data ARPU Growth
With tablets rising in demand and smartphones making up a larger chunk of new phone sales, we expect data revenues to continue to demonstrate healthy growth. However, the average data revenues per user could be pressured, as devices like e-readers tend to have low ARPU’s. Still, we expect this effect to be offset by smartphone upgrades and higher-priced tablet data plans.
No Impact of T-Mobile Deal
AT&T recently announced its acquisition of T-Mobile. But we will not see any impact of this in upcoming earnings since the deal is expected to close in 12 months. The benefit of greater price control as a result of reduced competition will likely be realized in the longer term after the deal closes.
See our complete analysis of AT&T stock here