Last week, my colleague Brian White wondered if AT&T will maintain its exclusive contract for Apple's iPhone. Brian's especially relevant question came exactly one week before AT&T (NYSE: T) is set to step into the earnings spotlight -- this Wednesday.
MarketWatch contends that this exclusivity is the reason AT&T will post "solid first-quarter results." It is MarketWatch's belief that the exclusivity may actually hurt AT&T because of how heavily subsidized upfront sales are for consumers.
The heavy subsidies may be worth the potential cut in earnings for AT&T, as the wave of neo-tech hipsters desiring the latest in phone technology has boosted AT&T's subscriber growth and wireless revenue.
As for earnings, the company is expected to rake in roughly 50 cents per share, which would be seven cents shy of the results from the same time last year. However, revenue is projected at $31.12 billion, a 1.2% gain from a year ago. The company's wireless business is forecast to add roughly 1.2 million subscribers, which is slightly lower than the 1.3 million new subscribers from the first quarter of 2008.
My question is this, will solid earnings -- or earnings that simply match expectations -- be enough to push AT&T higher? The stock faces substantial resistance in the form of its 10-month moving average, and its 20-week moving average is also in a resistive position. These results will need to be stellar to help AT&T magically obliterate all of this overhead resistance. On the other hand, matching expectations could help the stock break out of its current consolidation along the $26 level.
This earnings report is one to watch, as there are many variables playing in from the outside -- and this may be a case where the almighty iPhone hurts more than it helps.
My question is this, will solid earnings -- or earnings that simply match expectations -- be enough to push AT&T higher? The stock faces substantial resistance in the form of its 10-month moving average, and its 20-week moving average is also in a resistive position. These results will need to be stellar to help AT&T magically obliterate all of this overhead resistance. On the other hand, matching expectations could help the stock break out of its current consolidation along the $26 level.
This earnings report is one to watch, as there are many variables playing in from the outside -- and this may be a case where the almighty iPhone hurts more than it helps.
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