Earnings Preview: AT&T to report 1Q results

AT&T to report results for first quarter, looks set to be outdone by rival Verizon

Associated Press

NEW YORK (AP) -- AT&T Inc., the largest telecommunications company in the U.S., reports first-quarter results Tuesday before the stock market opens. It follows chief rival Verizon, which reported strong wireless results on Thursday.

WHAT TO WATCH FOR: The first quarter was a relatively slow one for AT&T, after the hoopla of the fourth quarter, which saw the launch of the iPhone 4S and the dissolution of its $39 billion bid to buy T-Mobile USA.

Verizon Communications Inc.'s wireless business got a boost in the first three months of the year as new iPhone subscribers started paying their monthly bills. Wireless service revenue grew 7.7 percent from a year ago. AT&T doesn't look set to replicate that, since Verizon keeps beating it in the recruitment of high-paying subscribers.

For the first quarter, analysts expect AT&T to report adding a net of about 200,000 subscribers on contract-based plans, which carry the highest monthly fees. That compares to Verizon's gain of 501,000.

AT&T revamped its data plans in the quarter, raising fees while providing more data. That should start helping results, analysts expect.

Union contracts for 40,000 workers on AT&T's landline side have expired. They've voted to authorize strikes, but they've remained on the job as the parties continue to negotiate. AT&T is trying to get them to shoulder more of their health care costs.

WHY IT MATTERS: Dallas-based AT&T had 103.3 million wireless devices connected to its network and 39 million landlines at the end of the last quarter. The stock is a component of the Dow Jones industrial average.

WHAT'S EXPECTED: Analysts polled by FactSet expect earnings of 57 cents per share on revenue of $31.84 billion.

LAST YEAR'S QUARTER: AT&T earned 57 cents per share on revenue of $31.2 billion.

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