|Day's Range||5.02 - 5.05|
Netflix has no chance of coming close to achieving the future cash flows baked into a current share price of around $325.
As approval for T-Mobile US Inc.’s deal with Sprint Corp. looms over the wireless industry, fellow carrier AT&T Inc. will show of the impact of its own mega-deal when the company reports second-quarter results next Wednesday after the closing bell.
We’re in the busiest time of earnings season, with over one-fourth of the S&P listed companies set to release quarterly reports in the coming days. Based on the S&P members that have reported so far, results are good. Total earnings are up 2.6%, and revenues are up 2.9%. While slow, this growth is better than the losses predicted before earnings got underway.Here, we look at three blue chip stocks which are reporting earnings this week. They are mainstays of investment portfolios, some are favorites of big-name investors, and all are available at a share price of $55 or less. AT&T, Inc. (T)The venerable phone company is well-known as one of the best dividend stocks on Wall Street. AT&T offers investors a 6.22% dividend yield – one of the highest among S&P-listed companies – with a current annual payout of $2.04 per share.The dividend is important because T shares show a somewhat shaky earnings future. The company took on tremendous debt last year when it acquired Time Warner; however, free cash flow since then has been sufficient to meet the dividend and the debt service. While AT&T carries $169 billion in debt, the company says that it can pay off 75% of the Time Warner purchase debt by the end of this calendar year.That will be major achievement, and investors will be looking for evidence that it is realistic. AT&T is counting on the acquisition to power its move toward content creation and distribution as it moves into the streaming landscape. The acquisition of Time Warner was intended to bring a solid content provider to T’s DirecTV segment, and boost declining subscriber numbers. On the earnings front, Wall Street expects T to show 89 cents EPS on July 24, up from 86 in the last quarter, but down 2.2% year-over-year.Looking toward T’s performance, JPMorgan analyst Philip Cusick wrote back in May that he expects a net loss of 2.9 million DirecTV subscribers in 2019 before seeing trends improve in 2020. At the same time, he expects “average revenue per remaining user to increase 3.4% this year, to $119.65.” His bottom line on the stock: “Sentiment should improve as the trajectory of sub losses improves in late 2019, but our sense is that investors are starting to look past it already—in the meantime the 6.2% dividend will continue to come through.” Cusick’s price target of $38 of suggests an upside of 15% to the T shares.Earlier this month, Citigroup’s Michael Rollins also put a buy rating on T, and bumped his price target up 8.8% to $37. His new target implies an upside of 12% to the stock.Shares in AT&T are selling for $32.79, and the stock holds a strong buy from the analyst consensus. That rating is based on 8 buys and 2 holds given in the past three months. The average price target, $36, suggests that T has room for 9% upside. Coca-Cola Company (KO)Investing guru Warren Buffett has long been a fan of Coca-Cola, both the drink and the stock. He sees the stock as a staple, bringing slow and steady profits, and paying out a reliable 3.1% dividend yield of $1.60 per share annualized. Coca-Cola bases its performance on a solid, and growing, line-up of beverage products.Heading into fiscal Q2, Coca-Cola’s stock is trading just 1.5% below its 52-week high point. The stock hasn’t always had such good times; starting in Q2 2015, the company saw revenues drop every quarter until Q4 2018. The trend has begun to reverse, however, and in Q3 2017 EPS began to grow again, while last quarter, Q1 2019, saw a revenue gain of 5.2%.More health-conscious consumers have been putting pressure on the company, as they shift away from sodas in the US domestic market. Coca-Cola has responded by diversifying its product line, to offer drinks across all segments of the beverage market. The company is already well-known for its Dasani water and Minute Maid juices; the company also owns Costa Coffee and Fuze Beverages.So far, the strategy appears to be working, and KO’s Q2 sales are expected to show an increase of 8.83%, powering a revenue jump of 12%. The expected EPS of 62 cents is 3.3% higher than the year-ago quarter, and 29% higher than Q1. The quarterly earnings are scheduled for release on July 23.Dara Mohsenian, of Morgan Stanley, keeps KO as his ‘top overweight pick,’ saying “the beverage maker offers a growth profile that is underappreciated by the Street.” He adds, “On a two-year average basis, Coca-Cola managed to improve its organic topline growth by 80 basis points in the past few quarters which is above the 70 basis point range many of its peers are showing.”In line with his upbeat outlook on KO, Mohsenian increased his price target by 3.6%, from $55 to $57, indicating confidence in the stock and an upside potential of 11%.Coca-Cola’s analyst consensus rating is a moderate buy, based on 4 buys and 5 holds set in the past three months. The average price target, $52.29, is only 1.75% higher than the current share price of $51.39. These numbers reflect the stock’s ongoing transition away from the losses of recent years and towards the upbeat outlook detailed by Mohsenian. Ford Motor Company (F)Our third pick, Ford Motor, may be the most controversial here. Like Coca-Cola, it has a mixed rating, but it also the highest potential upside, the lowest cost of entry, and the second-highest dividend yield of the stocks in this list. In addition, shares in Ford are up 33% year-to-date, far outpacing the S&P 500’s 18.5% gain.Ford maintains its position by its popular and profitable lineup of pickup trucks. The F-Series (F-150, F-250, and F-350) are consistent best-sellers, and have led the US market in automobile sales since 1986. In 2018 alone, F-Series trucks brought the company $41 billion in revenues. According to Jim Farley, Ford’s head of global markets, that sales performance makes the F-Series a more valuable brand than Coca-Cola.Ford’s management is essentially using the popular and high-margin trucks and SUVs as a cushion while the company is in the process of reducing its small-car sales and developing lines of electric and autonomous vehicles. Possession of such an asset – the F-Series brand – has helped keep Ford’s revenues mostly stable in recent quarters, with revenue volatility in the past three years holding in an 8% range.Looking forward to the Q2 earnings report, Ford’s revenues are expected to come in at $34.86 billion, a slip of 2.9% from the year-ago quarter. True to Ford’s form, Q3 guidance predicts gain of 2.7%. Q2 EPS is expected between 30 and 33 cents, a gain of 11% to 22% over last year’s Q2. EPS for FY2019 is expected at $1.38, a gain of 6.15% from FY2018.Recent analyst reviews of Ford have focused on the company’s strategic partnership with Volkswagen in developing electric and autonomous vehicles. RBC’s Joseph Spak, while keeping a hold on the stock, increased his price target by 10%, to $11, after Ford announced plans to work with VW and Argo AI developing a high volume EV in the European market. Spak says that Ford management deserves high credit for strategic thinking. His price target is 7% above Ford’s current share price.On the bull side is UBS analyst Colin Langan, who boosted his price target to $13 and put a buy rating on the stock. Looking at the European market and Ford’s initiatives in the EV segment, he says, “Given the upcoming European regulation shifts, this should help Ford avoid emission fines.” Langan’s price target suggests a 27% upside to Ford shares.Overall, Ford has a moderate buy from the analyst consensus based on an even split of 6 buys and 6 holds. Shares trade for $10.20 with an average price target of $11.77, giving the company’s stock an upside potential of 15%.
In an early morning tweet on Saturday, CBS confirmed that its stations had been dropped for DirecTV and AT&T; U-Verse customers.
Retirement Systems of Alabama made the investment moves in the second quarter. Stock in Walmart has reached record highs since then.
CBS Corp and AT&T Inc failed to renew their contact, resulting in millions of DirecTV subscribers losing access to CBS programming. CBS television stations in over a dozen U.S. cities, including New York and Los Angeles, went dark for DirecTV customers effective 0200 ET (0600 GMT), CBS said in a statement on Saturday. "While we continue to negotiate in good faith and hope that AT&T agrees to fair terms soon, this loss of CBS programming could last a long time," CBS added, as the companies blamed one another for the deal's collapse.
CBS television stations in over a dozen U.S. cities, including New York and Los Angeles, went dark for DirecTV customers effective 0200 ET (0600 GMT), CBS said in a statement on Saturday. "While we continue to negotiate in good faith and hope that AT&T agrees to fair terms soon, this loss of CBS programming could last a long time," CBS added, as the companies blamed one another for the deal's collapse. CBS, the network with hit shows like "NCIS" and "The Late Show with Stephen Colbert" is directing customers to a website called "KeepCBS.com", where they are urged to mail, call or post messages onto DirecTV's social media pages.
Investors fled Netflix (NFLX) stock after the firm reported potentially worrisome Q2 subscriber figures on Wednesday. Now many on Wall Street are left to wonder if the major user miss is a hiccup for an impressive growth stock, or the start of much tougher times.
Editor's note: InvestorPlace's Earnings Reports to Watch is updated weekly. Please check back next week for our latest earnings picks.Earnings season has arrived - and so far, it hasn't been great news. Bank earnings reports looked mixed. Netflix (NASDAQ:NFLX) fell hard after earnings, hitting tech indices. The market isn't quite set to crash, but a modest pullback this week at the beginning of the earnings calendar might suggest some caution.Further downside wouldn't be necessarily surprising, but it would be ironic. As I've noted in this space before, the worry about the market in recent months was that a relative lack of earnings reports would be a problem. Corporate earnings mostly provided good news for the market in recent years. External factors, most notably the trade war with China, were seen as the big risk.InvestorPlace - Stock Market News, Stock Advice & Trading TipsU.S. equities instead confounded expectations by moving higher despite seemingly negative news on the macro and political fronts. The risk now, with the earnings calendar again full, is that investors might be asking more of U.S. companies than they can provide in this environment.The earnings calendar this week should provide some clarity on that front. Several key companies will report and give a picture of demand in important markets: Caterpillar (NYSE:CAT), industrial distributor W.W. Grainger (NYSE:GWW), Visa (NYSE:V), Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), AT&T (NYSE:T), United Parcel Service (NYSE:UPS), Intel (NASDAQ:INTC), and others. * 10 Tech Stocks That Are Still Worth Your Time (And Money) But the focus here will be on two of the largest companies - the kind that can move indices and markets - and perhaps the market's most controversial stock. In all three cases, the reaction to earnings reports will be as interesting as the numbers themselves. This is a big week, and the biggest names will have the biggest impact. Facebook (FB)Source: Shutterstock Earnings Report Date: Wednesday, July 24, after market closeThere's one positive for Facebook (NASDAQ:FB) ahead of its Q2 earnings report. Wednesday afternoon's release almost certainly won't be worse than the second quarter release last year.A year ago Facebook guided for significantly higher spending, which spooked investors. FB stock fell 20% the next day, the largest one-day loss of market value in history.That said, Facebook earnings could be a little dicey. FB stock still hasn't recovered all of last year's losses (which continued to a December low at which point the stock was down over 40%), but it has come close. Expectations clearly have been normalized. Worries about user defections amid the company's scandals have faded.Investors seem to believe that all is back to normal for Facebook. I'm inclined to agree. But if that's not the case - particularly if Facebook shows any weakness on the user front - there's not nearly as much downside priced in. A difficult quarter for Facebook could read across to other social media plays like Twitter (NYSE:TWTR) and Snap (NYSE:SNAP).Facebook has convinced a lot of investors so far that it's back on track. It will need to convince a few more to rally further next week. Tesla (TSLA)Source: Shutterstock Earnings Report Date: Wednesday, July 24, after market closeA big quarter looms for the market's most divisive stock, Tesla (NASDAQ:TSLA). Shares bounced 44% since TSLA stock hit a 30-month low in late May - but still sit 34% off highs reached after the company's supposed sale nearly a year ago.Tesla already has reported deliveries for the quarter, which were a record. But the question bears (myself included) are asking is: were those deliveries profitable? With mix shifting to the lower-priced Model 3 and away from the S and the X, Tesla profits could disappoint.That's just one reason why this is a big quarter for TSLA. After the hugely disappointing Q1, a strong quarter would re-engage the growth narrative here - and put TSLA stock on track to head back to the $300-range. It would establish that Tesla can be profitable with the 3 - which significantly improves the long-term case for the stock. * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip There's no shortage of Tesla skeptics out there: CEO Elon Musk and Tesla can quiet those doubters with a big quarter. Anything less, and margin and profit worries stay front and center for at least the rest of the year. Amazon (AMZN)Source: Shutterstock Earnings Report Date: Thursday, July 25, after market closeAt this point, Amazon's (NASDAQ:AMZN) earnings report matters simply because Amazon matters. Its revenue is deep enough and broad enough that it acts as a proxy for the broader U.S. economy. Its valuation - still 52x 2020 EPS estimates - is high enough that investor reaction to its earnings can signal potential reactions elsewhere. For instance, AMZN sold off sharply despite a decent Q3 report in late October, and tech stocks as a whole plunged for the next seven weeks.And so Amazon's earnings report on Thursday evening will be important for the market as a whole. The stock again has suffered from the "trillion dollar curse" in recent sessions. Valuation concerns remain.If investors are willing to bid up AMZN after the Q2 earnings report, there's room for other growth stocks to keep rising. If AMZN stock gets pounded after a strong quarter, however, investors need to stay on guard. We saw exactly that happen nine months ago - and it signaled on the largest sell-offs of the decade.As of this writing, Vince Martin has a bearish options position in Tesla. He has no positions in any other securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Tech Stocks That Are Still Worth Your Time (And Money) * 7 Marijuana Stocks With Critical Levels to Watch * 7 of the Best Smart-Beta ETFs to Target Right Now The post 3 Earnings Reports to Watch Next Week appeared first on InvestorPlace.
As AT&T; looks to lighten its debt load, the Dallas-based telecommunications and media giant may be looking to unload another asset.
The "preferred cloud provider" agreement with the telecom giant is yet more proof that the aging software giant has successfully reinvented itself.
HBO Max, HBO's new streaming service targeted at children and young adults, has named its executive team, which includes three former Turner Broadcasting executives.
The site sits in the heart of downtown San Jose's booming development scene. It's walking distance to San Pedro Square, a block from Adobe's headquarters — where the software company recently broke ground on a new 1.3 million-square-foot office tower addition — and is across the street from CityView Plaza, which developer Jay Paul Co. purchased last year for $283.5 million.
Increased 5G deployment, thrust on digital and media business along with focus on edge computing capabilities are likely to enable AT&T (T) to generate higher second-quarter 2019 revenues.
IBM’s profit beat was overshadowed by its fourth straight drop in quarterly revenue, leaving some analysts to wonder if it can make itself relevant in the modern age.
On Thursday, a Thomson Reuters report suggested that AT&T; (T) might sell its business in Puerto Rico for around $3 billion.
AT&T (NYSE:T) has begun the hard task of trying to pay back the debt it took on buying Time Warner. T stock investors got a sense this week of just how difficult that's going to be, as they were reminded of how big of a mistake the company made on the deal.Source: Shutterstock The company took to the airwaves this week to try to convince the world that its outsourcing of cloud to International Business Machines (NYSE:IBM) is somehow getting it back into the tech game.IBM said it will run its software defined network operations through AT&T and the two companies will also go to market together. But it's clear from IBM's press release that if money is moving here, it's moving from AT&T to IBM, not the other way around.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBetween the lines of this week's announcement, it's clear that AT&T is out of the technology business. Hide the LayoffsAT&T is quietly moving toward yet-another round of layoffs while insisting that calling them layoffs is misleading. More T-speak is in store.A plan to start charging $4/month to block spam is sold as an automatic block on robocalls. Grants to study quantum computing are spun as AT&T entering the space.A "me-too" streaming service called HBO Max is called innovation because it includes 20-year old re-runs while AT&T quietly cuts headcounts at WarnerMedia. * 10 Stocks to Sell for an Economic Slowdown AT&T is grabbing for cash wherever it can find it. Bounty hunters and stalkers are being told just where their victims are without regard to consequences. Customers who sue are being told by AT&T lawyers they have no rights in court and must go to binding arbitration it controls.AT&T has pushed through multiple price increases at DirecTv Now while playing hardball with network affiliates, taking them off its systems. Desperate for CashThere's good reason for AT&T to be nickel-and-diming everyone. You won't find it in the income statement. Look at the balance sheet and statement of cash flows.In March AT&T reported it had $185 billion in long-term debt but only $152 billion in property, plant and equipment. It claimed more than $162 billion worth of "intangible assets" and $146 billion of "goodwill" to boost its asset total to $583 billion. There is also $104 billion in undefined "other liabilities."AT&T reported $11 billion of operating cash flow, but $5.4 billion went back into maintaining the debt load and $3.7 billion was needed to pay its dividend. The best cash flow report in a year showed $1.2 billion in net cash.As I noted a few weeks ago, AT&T has an enormous technology debt. Much of its physical plant is obsolete, wires for phone services no one wants. Its wireless unit will increasingly compete with its U-Verse cable as 5G is rolled out. Cord-cutting means those Warner Media cable channels aren't worth what you think, either. * 7 Dependable Dividend Stocks to Buy The reason you buy AT&T stock is for that 51 cents per share dividend. But the more AT&T pounds the table to bring the stock price up, the less valuable even that becomes. The stock market's recent rise has pressured the yield from almost 6.6% to about 6%. The stock enters trade July 17 a nickel higher than the analysts' average target price for this time next year. Bottom Line on AT&T StockIf AT&T CEO Randall Stephenson wanted to bet the company on a big acquisition, he should have bought IBM. It's at least a technology company. Instead he bought Time Warner, a media company whose assets mostly serve the dying niche of cable.If AT&T can squeeze profits from captive customers for the next 10 years, it might make a dent in its debt load. But the assets are rapidly declining in value. This story will not end well.Dana Blankenhorn is a financial and technology journalist. He is the author of the mystery thriller, The Reluctant Detective Finds Her Family, available at the Amazon Kindle store. Write him at email@example.com or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this article. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks Top Investors Are Buying Now * The 10 Best Cryptocurrencies to Keep on Your Radar * 7 Marijuana Penny Stocks That Could Triple (But You Won't Make Money) The post AT&T Stock is Now the Content Play Formerly Known as a Tech Stock appeared first on InvestorPlace.
Ben Reynolds selected AT&T; Inc. (T) as his favorite investment for 2019. The stock rose 17.4% in the first half of the year. Here's the latest update on the telecom giant from income expert and editor of Sure Dividend.
(Bloomberg) -- The largest U.S. telephone companies last year asked regulators to kill limits on the rates smaller carriers can be charged for connecting to the giants’ networks.Now the small carriers are claiming they have successfully defended the regulations as the Federal Communications Commission nears conclusion of a proceeding it has acted on in parts.“We see it as a huge victory,” said Chip Pickering, chief executive officer of the trade group Incompas. Its member companies that offer broadband service and need to connect through lines controlled by companies such as AT&T Inc. and Verizon Communications Inc.The regulations are designed to ensure small companies have access to lines that carry traffic for businesses, schools and homes -- and can use those connections to expand broadband competition by building new fiber links.USTelecom, a trade group with members including AT&T and Verizon, filed the petition with the FCC to eliminate rules in May 2018 and is claiming a partial victory.“We’re thrilled about the steps taken by the FCC to grant important parts” of the petition, Jonathan Spalter, chief executive officer of USTelecom, said in an interview.Eliminating the rules clears the way for more investment in modern networks, according to the trade group.1996 RulesIn its petition, USTelecom said more companies are offering service, undermining the need for the rules put in place in 1996, as the U.S. opened communications markets to more competition.For instance, companies subject to the rules served 186 million wholesale and retail land lines in 2000 compared with 35 million in 2018, according to the petition, which added that some 60% of U.S. households have turned to wireless service.“The mandates at issue here -- principally involving access to old copper network facilities and protections related to an extinct ‘long distance voice market’ -- are not necessary to protect competition or consumers,” USTelecom said in its petition.The agency eliminated some reporting requirements in April, and earlier this month lifted pricing regulations for lines that carry bulk business traffic in most of the country -- decisions that together represented “substantial and meaningful” progress, according to a blog post by Spalter.In June, USTelecom withdrew its request to remove rules around fiber lines that can carry signals from town to town, usually in less populated areas. And in July it withdrew its request to kill rules about local lines that can carry broadband.Copper LinesThe FCC must act on the remainder of USTelecom’s petition by Aug. 2, and Chairman Ajit Pai has recommended the agency remove rate mandates on old copper lines that provide voice service, according to a background document provided by the FCC.The FCC, while not commenting on the outcome, said in a statement that the issues that remain to be decided “were intended to open monopoly local phone companies to competition in voice services” and are no longer necessary.Incompas, representing the small service providers, says it scored victories with the withdrawals by USTelecom of portions of the petition in June and July. The trade group led a campaign that included letters from more than 9,000 customers to the FCC, where Pai has emphasized creating more broadband connections.“When it comes to fiber, they’re removing barriers,” said Pickering, the Incompas leader. “We won the case by being consistent with the commission’s priorities.”Spalter, the USTelecom chief, said his group would continue to make the case for lifting old rules. “As surely as the sun sets in the west, there will be time and space for the FCC to modernize the outdated rules, to make them reflect the competition that exists,” Spalter said.To contact the reporter on this story: Todd Shields in Washington at firstname.lastname@example.orgTo contact the editors responsible for this story: Jon Morgan at email@example.com, John HarneyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- AT&T Inc., looking for ways to pay down debt after the $85 billion takeover of Time Warner Inc. last year, is considering the sale of its Puerto Rican operations, according to a person familiar with the situation.The business could fetch about $3 billion, said the person, who asked not to be identified because the matter is private. The potential sale was reported earlier Thursday by Reuters.The telecom giant has been looking to strengthen its balance sheet after the Time Warner purchase turned it into a sprawling media conglomerate. It previously agreed to sell its stake in Hulu and its New York offices -- deals that generated about $3.6 billion.It’s also weighing a sale of its regional sports networks, part of a plan to cut as much as $8 billion in debt by the end of the year, people with knowledge of the matter said earlier this month. The four regional networks, which includes rights to teams such as the hockey’s Pittsburgh Penguins, basketball’s Houston Rockets and baseball’s Seattle Mariners, could fetch close to $1 billion, the people said.Chief Executive Officer Randall Stephenson has said the company’s top priority this year is to reduce debt. Investors have generally been supportive of the efforts. The shares are up 16% this year, outpacing the 1.8% gain of top rival Verizon Communications Inc.(Updates with other deals starting in third paragraph)To contact the reporter on this story: Scott Moritz in New York at firstname.lastname@example.orgTo contact the editor responsible for this story: Nick Turner at email@example.comFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.