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AT&T Earnings Preview: New Tricks From An Old Telco

Monday, 21 Apr 2008 | 7:15 PM ET

AT&T (T)

Telecomm giant. Traditional wireline, wireless, internet and more. Dow Component.

Reports Q1 earnings Tuesday 4/22 "by 8a" ET. Conference call at 10a ET.

AT&T
AT&T

WHAT WILL MOVE THE STOCK:

SUBSCRIPTIONS, ARPU - How many new subscribers did AT&T get? How much money is each sub spending? That's what ARPU measures. ARPU = Average Revenue Per User.

NEW GROWTH - How is AT&T's U-verse (TV, broadband etc.) service doing? In late January, AT&T announced a multi-year partership with Yahoo! for advertising on both wireless handsets and computer screens. Financial terms weren't disclosed. Is this deal putting money on AT&T's bottomline yet?

PHONE DEMAND - On Monday, Texas Instruments' CFO said demand for high-end phones is "a good bit less than expected." He added demand for 3G phones (next generation, higher bandwidth, etc.) will probably increase over time, but at a more delayed pace. Is AT&T seeing any weakness in demand for smartphones? This leads nicely into...

THE IPHONE CONNECTION - AT&T is the exclusive U.S. network for the Apple's iPhone, so AT&T's new subscription figures will give a good look at how well Apple's hot gadget is selling. Keep in mind two things when trying to gauge what AT&T's iPhone numbers mean for Apple: 1) Outside the U.S., Apple has cut deals with other mobile networks and 2) A fair number of iPhones sold in the U.S. are not being signed up to AT&T's network. How many?

GUIDANCE - Last quarter, AT&T said it was confident it could maintain double-digit earnings growth in 2008. Is AT&T still standing by that goal? Is U.S. economic weakness taking a bite out of AT&T sales and profits?

ESTIMATES:

Q1 EPS up 14% to $0.74, revenues up 6% to $30.696 billion

Q2 EPS up 11% to $0.78, revenues up 6% to $31.230 billion

FY 08 Estimates: EPS up 14% to $3.14, revenues up 5% to $125.270 billion

Source: Thomson Reuters

Year-ago actuals: Q1 EPS $0.65, Rev. $28.969 billion

*All estimates are current as of 4/21 and subject to change.*

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