Earnings Preview: Higher profit seen for AT&T

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 is generally a sleepy one for cellphone companies, lacking in major phone launches. That means it's time to take profits, and AT&T is expected to show a profit increase from last year.

The number of net new devices signed up on service contracts is usually a figure of focus. AT&T is likely to add fewer than the 677,000 added by Verizon in the quarter — it hasn't beat Verizon on this measure since 2010, before Verizon had the iPhone.

There have been rumors this year that AT&T is interested in investing overseas, but the company has so far lent no support to those ideas. They're likely to come up again as analysts get a chance to talk to executives on a conference call after the earnings release.

There is turmoil in the lower ranks of the wireless industry, as No. 4 T-Mobile USA is set to buy No. 5 MetroPCS Communications Inc., and two suitors are vying for Sprint Nextel Corp., the No. 3 contender. AT&T is somewhat insulated from the upheaval, but faces its own challenges, as Verizon extends its lead and growth slows.

WHY IT MATTERS: Dallas-based AT&T had customers for 77.8 million wireless devices and 34.8 million landlines at the end of last year. Its stock is a component of the Dow Jones industrial average.

WHAT'S EXPECTED: Analysts polled by FactSet expect earnings of 64 cents per share on revenue of $31.7 billion.

LAST YEAR'S QUARTER: AT&T earned $3.6 billion, or 60 cents per share, in the first quarter of 2012. Revenue was $31.8 billion.