AT&T (T) Q4 Earnings Preview

Shares of AT&T (NYSE:T) have surged over 13% since Christmas along with much of the market. With that said, AT&T stock is still down 18% in the last year as investors wait to see what to make of its Time Warner acquisition and how it adapts in a new entertainment age as it prepares to challenge Netflix (NASDAQ:NFLX) with its own streaming offering.

With that said, let’s see what to expect from AT&T’s Q4 financial results that are due out Wednesday, January 30.

Overview

AT&T completed its purchase of Time Warner last June in a deal worth roughly $81 billion, but the Department of Justice is still trying to fight the merger. The company’s purchase brings Warner Bros. film studio along with CNN, HBO, and other properties under the A&T umbrella, which already includes DirectTV and its wireless business.

Looking ahead, AT&T has joined the 5G race along with the likes of Verizon (NYSE:VZ) and T-Mobile (NYSE:T) . In fact, the wireless giant grabbed headlines recently after it put “5GE” labels on top of some customers’ Android smartphone screens. AT&T said the E stands for “evolution.”

AT&T has also said that is will launch a new stand-alone, direct-to-consumer streaming service in 2019 in order to further challenge Netflix, Amazon (NASDAQ:AMZN) and soon enough Disney (NYSE:DIS) and Apple (NASDAQ:AAPL) . The company plans to include HBO content on its offering that will be separate from the DirecTV Now and its lower-cost WatchTV (also read: Netflix Q4 Earnings Call: Content, Debt, Disney, YouTube & More).

Outlook

Looking ahead, our current Zacks Consensus Estimate calls for A&T’s fourth-quarter revenues to surge 16.2% to reach $48.42 billion. Last quarter, the firm’s revenues popped 15.3% from the year-ago period, with much of the growth driven by its Time Warner acquisition. This, however, fell short of Wall Street estimates.

We can see that prior to 2015, AT&T’s revenues hadn't climbed much for almost eight straight years until it purchased DirectTV that summer.

At the bottom end of the income statement, AT&T’s adjusted quarterly earnings are expected to jump 8.97% to touch $0.85 per share. The wireless and entertainment power’s adjusted earnings surged 21.6% in Q3, which also failed to top estimates.

Earnings Trends

Moving on, investors should note that AT&T has received some mixed earnings estimate revision activity over the last 60 days. With that said, we can see that these revisions have only moved upward over the past 30 days, which includes some positivity in the last week.

This means that at least some analysts are more positive about AT&T’s quarterly earnings results than they were not too long ago, which could be a good sign.

AT&T is currently a Zacks Rank #3 (Hold) and sports “A” grades for both Value and Momentum in our Style scores System.

AT&T is scheduled to release its fourth-quarter fiscal 2018 earnings results before the market opens on Wednesday, January 30. Make sure to come back to Zacks for our full analysis of the firm’s actual financial results.

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?

Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.

See Latest Stocks Today >>