AT&T Adds A Staggering 500K New Subs Last Quarter On Surging Tablets & Smartphones Activations
Jun 7, 2013
AT&T: Bulls Cheer Higher Sub View, Despite Margin Pressure
By Tiernan Ray
The Street today was pondering AT&T‘s (T) announcement last night, just before a meeting with sell-side research analysts, that it is seeing stronger subscriber growth in its “U-verse” high-speed Internet service and its television services than it had a year earlier, and that it expects to add half a million post-paid wireless subscribers this year, adding that its outlook for capital spending is for a “downward bias.”
Despite the upbeat news about subscriber additions, both bull and bear acknowledge there is increased pressure on AT&T’s profit margin from rising expenses, including promotions to lure those subscribers.
AT&T shares today fell 36cents, or 1%, to $35.45.
Nomura Equity Research‘s Mike McCormack, who has a Buy rating on AT&T shares, and a $38 price target, cut his EPS estimate this quarter to $2.45 form $2.50, writing that “While margin pressure is mounting, AT&T will continue to generate significant free cash flow.”
McCormack notes that subscriber additions were above his own 300,000 forecast. The higher adds are helped by tablet sales but also better handset additions.”
“We are also raising our postpaid upgrade rate from 6% to 7.25% for the iPhone trade-in offer.”
LOL.......That was last qtr. Smartphone sales are not surging this qtr. . In fact its the opposite, I talk to the sales reps at ATT and Apple store every week. There is a reason Apple forecast a turd for Q3.
Yet another misleading pumper headline. Sales were up for high speed internet and tv. Did not say anything about "surging" smartphone and tablets activations. In fact the reason for Norma Equity EPS cut was because ATT is spending a lot to lure new smartphone customers w promotions.