What to ex­pect from Ver­i­zon and AT&T earn­ings

Financial Mirror (Cyprus) - - FRONT PAGE -

The coun­try’s two largest wire­less car­ri­ers are re­port­ing first-quar­ter re­sults this week, with Ver­i­zon Com­mu­ni­ca­tions Inc. (NYSE: VZ) com­ing first, ahead of Tues­day’s open­ing bell. AT&T Inc. (NYSE: T) an­nounces its re­sults Wed­nes­day af­ter mar­kets close.

An­a­lysts have a con­sen­sus earn­ings per share (EPS) call for Ver­i­zon of $0.95, on rev­enues of $32.27 bln. That is about 13% more on EPS and 4.7% more in rev­enues than Ver­i­zon posted in the first quar­ter of 2014. The dif­fer­ence is at least partly due to the ac­qui­si­tion of all of Ver­i­zon Wire­less, which was com­pleted in Fe­bru­ary of 2014.

How­ever, Ver­i­zon has dis­ap­pointed an­a­lysts for the past two quar­ters, post­ing EPS a penny be­low es­ti­mates in both quar­ters. Ver­i­zon may or may not be rolling out a new stream­ing dig­i­tal video pack­age that rep­re­sents a seis­mic shift in how con­tent own­ers li­cense their prod­ucts. Ver­i­zon is sign­ing up cus­tomers for the new packages, but Walt Dis­ney Co.’s (NYSE: DIS) ESPN sports net­work has said that the of­fer may vi­o­late the agree­ment the net­work has with Ver­i­zon.

The con­sen­sus price tar­get on Ver­i­zon stock is $51.54, and the 52-week trad­ing range is $45.09 to $53.66.

AT&T, which was re­cently re­placed by Ap­ple Inc. (NAS­DAQ: AAPL) in the 30 stocks that make up the Dow Jones Industrial Av­er­age, is fore­cast to re­port EPS of $0.63 and rev­enues of $32.8 bln. As with Ver­i­zon, an­a­lysts have been within a penny of ac­tual EPS in the past two quar­ters, one where the com­pany beat the es­ti­mate and one where it did not. Just last week an an­a­lyst at Credit Suisse re­it­er­ated the firm’s Out­per­form rat­ing on AT&T’s stock and $38 per share price tar­get.

The con­sen­sus price tar­get on AT&T is around $34.00 per share, and the 52-week range is $32.07 to $37.48.

There are a few head­winds for both tele­com gi­ants how­ever. An­a­lysts at Wells Fargo are pro­ject­ing the T-Mo­bile US Inc. (NYSE: TMUS) added more hand­set sub­scribers in the first quar­ter of 2015 than ei­ther Ver­i­zon or AT&T — or Sprint Corp. (NYSE: S), for that mat­ter. The an­a­lysts ex­pect T-Mo­bile to add 1.03 mln post­paid (con­tract) sub­scribers in the first quar­ter, com­pared with around just 50,000 for Sprint. AT&T has al­ready said it ex­pects to add around 400,000 and Ver­i­zon is ex­pected to add 620,000 post­paid cus­tomers, but most new sub­scribers at both com­pa­nies are ex­pected to add tablets not hand­sets.

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