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Will AT&T (T) Disappoint Investors This Earnings Season?
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AT&T Inc. (T - Free Report) is scheduled to report fourth-quarter 2016 financial numbers on Jan 25, after markets close.
Last quarter, AT&T’s bottom line matched the Zacks Consensus Estimate. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in one of the previous four quarters, with an average beat of 0.70%. Let’s see how things are shaping up for this announcement.
Shares of AT&T underperformed the Zacks categorized Wireless National over the past three months. The stock gained 4.39% while the industry added 6.13% over the time span.
Factors Likely to Influence this Quarter
AT&T forayed into the over the top (OTT) space with its DirecTV Now on Nov 28, 2016. AT&T also announced agreements with Twenty-First Century Fox, Inc. (FOXA - Free Report) and Byron Allen’s Entertainment Studios Networks to expand the number of channels on DirecTV Now.
Further, if the acquisition of Time Warner by AT&T goes through, the combined entity will become a major player in the consolidated telecom-media space. Moreover, 4G LTE wireless networks and the 5G technology trials with Ericsson (ERIC - Free Report) bode well. Collaboration with Intel Corp. (INTC - Free Report) will develop new software-centric network technologies. AT&T is also forging ahead in the Internet of Things (IoT) space.
AT&T, DISH Network L.L.C., a wholly-owned subsidiary of satellite TV operator DISH Network Corp. (DISH), and WPP Group plc, jointly announced plans to acquire advertising company INVIDI Technologies to expand their respective addressable advertising businesses.AT&T’s Enhanced Control, Orchestration, Management and Policy (ECOMP) virtualization platform is also gaining popularity. After French telecom Orange S.A. , BCE Inc.’s subsidiary Bell Canada was AT&T’s second telecom partner to test it.
We believe that the entry into the OTT space, media industry, 4G LTE and 5G trials along with AT&T’s ECOMP may favor of the company and add to it upcoming quarterly results.
Moreover, AT&T operates in a saturated wireless market where spectrum crunch is a big issue. Moreover, loss in access lines, stringent regulatory measures and union issues are major headwinds. The company has also been facing intense competition from peers, compelling it to lower the price of its services due to lack of demand. It will be interesting to watch whether AT&T’s upcoming results can tide over these challenges.
Earnings Whispers
Our proven model does not conclusively show that AT&T is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: AT&T has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 66 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: AT&T has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
BlackBerry’s earnings surpassed the Zacks Consensus Estimate in all of the previous four quarters, with an average beat of 62.50%.
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In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>
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Will AT&T (T) Disappoint Investors This Earnings Season?
AT&T Inc. (T - Free Report) is scheduled to report fourth-quarter 2016 financial numbers on Jan 25, after markets close.
Last quarter, AT&T’s bottom line matched the Zacks Consensus Estimate. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in one of the previous four quarters, with an average beat of 0.70%. Let’s see how things are shaping up for this announcement.
Shares of AT&T underperformed the Zacks categorized Wireless National over the past three months. The stock gained 4.39% while the industry added 6.13% over the time span.
Factors Likely to Influence this Quarter
AT&T forayed into the over the top (OTT) space with its DirecTV Now on Nov 28, 2016. AT&T also announced agreements with Twenty-First Century Fox, Inc. (FOXA - Free Report) and Byron Allen’s Entertainment Studios Networks to expand the number of channels on DirecTV Now.
Further, if the acquisition of Time Warner by AT&T goes through, the combined entity will become a major player in the consolidated telecom-media space. Moreover, 4G LTE wireless networks and the 5G technology trials with Ericsson (ERIC - Free Report) bode well. Collaboration with Intel Corp. (INTC - Free Report) will develop new software-centric network technologies. AT&T is also forging ahead in the Internet of Things (IoT) space.
AT&T, DISH Network L.L.C., a wholly-owned subsidiary of satellite TV operator DISH Network Corp. (DISH), and WPP Group plc, jointly announced plans to acquire advertising company INVIDI Technologies to expand their respective addressable advertising businesses.AT&T’s Enhanced Control, Orchestration, Management and Policy (ECOMP) virtualization platform is also gaining popularity. After French telecom Orange S.A. , BCE Inc.’s subsidiary Bell Canada was AT&T’s second telecom partner to test it.
We believe that the entry into the OTT space, media industry, 4G LTE and 5G trials along with AT&T’s ECOMP may favor of the company and add to it upcoming quarterly results.
Moreover, AT&T operates in a saturated wireless market where spectrum crunch is a big issue. Moreover, loss in access lines, stringent regulatory measures and union issues are major headwinds. The company has also been facing intense competition from peers, compelling it to lower the price of its services due to lack of demand. It will be interesting to watch whether AT&T’s upcoming results can tide over these challenges.
Earnings Whispers
Our proven model does not conclusively show that AT&T is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: AT&T has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 66 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: AT&T has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
AT&T Inc. Price and EPS Surprise
AT&T Inc. Price and EPS Surprise | AT&T Inc. Quote
A Key Pick
Here is a company that has the right combination of elements to post an earnings beat this quarter.
BlackBerry Ltd. , with an earnings ESP of +50.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
BlackBerry’s earnings surpassed the Zacks Consensus Estimate in all of the previous four quarters, with an average beat of 62.50%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>