Telecommunication concern Verizon (NYSE: VZ), whose competitors include AT&T (NYSE: T), Sprint Nextel (NYSE: S), and Qwest Communications (NYSE: Q), reported earnings for the third quarter on Monday, and investors could not have been happier. As Wall Street continued its painful bearish slide, shareholders of Verizon were bragging about the 10% rise in the company's stock price. Question is, should you be a buyer of Verizon's stock at this point?

The numbers were decent enough. According to the press release, earnings per share were $0.66. Management only succeeded at matching expectations for Q3, according to this earnings-preview piece by Brent Archer. Honestly, I was surprised at the big pop in the stock yesterday. Considering how badly the markets have been doing, and the fact that we're facing a global recession, I would have figured on a more muted response to Verizon's numbers. After all, if we are facing a tough recession (and I'm fully on board with that sentiment), what's going to happen to the growth rate of the FiOS product? That product is doing well, as are other parts of the Verizon portfolio, but I wouldn't have been a buyer into the stock's strength today. And I say that without a doubt.

But, with Verizon, there is that great dividend yield and cash-flow growth. Operational cash flow from continuing operations was up almost 6%, and capital expenditures decreased. That's great news for dividend investors, as more free cash was left over. I think the market looked at Verizon as being oversold and decided to buy in. The company seemed to have a good Q3, and I think long-term investors will definitely do well with the stock; in fact, the press release mentioned that management saw fit to increase its dividend 7% during the quarter, expressing confidence in the company's current business models. But I believe even longer-term thinkers would do well to wait for a pullback in the share price before either initiating a new position or adding to an existing holding. I simply think there was too much excitement around the stock after its report.

Disclosure: I don't own any company mentioned; positions can change at any time.

Sprint (NYSE:S) often shows up in customer services surveys as one of the least respected companies in America. That has caused a number of its cellular subscribers to drop service and take their business elsewhere.

To try to win back customers, Sprint's CEO is even going on TV. According to The New York Times, "In the commercials, Mr. Hesse asks customers to e-mail him with complaints and to give Sprint another chance." Daniel R. Hesse is Sprint's new top man.

Hitting the airwaves with a new message hardly seems worth the time, or money.

Sprint may be able to get some customers back with its new Samsung Instinct phone, which has gotten good reviews. But, there is no evidence in polls about how subscribers view the company to indicate that the firm has become a symbol of an American cellular provider with happy customers.

Fix the problem. Stay off the tube.

Douglas A. McIntyre is an editor at 247wallst.com.

Now that Verizon Wireless has agreed to purchase privately held Alltel from its private equity owners (giving them a small profit and an out), what else is on tap for the soon-to-be largest wireless carrier in the U.S.? Verizon Wireless is chomping at the bit to overtake AT&T Inc. (NYSE: T) as the largest wireless carrier in the U.S., and its acquisition of Alltel will give it an 8 million+ wireless subscriber advantage over Ma Bell.

Although Alltel's buyout by Verizon was expected last year, it's now going to finally happen. Both companies use the same technical wireless standard, so this will be an easy merger. There will be no issues like when Sprint merged with Nextel in 2005 and the two incompatible networks caused an epic failure of those two companies to merge into one. Speaking of Sprint Nextel Corp. (NYSE: S), where does it play into the Verizon-Alltel landscape? Does its WiMAX plans now become derailed with the Verizon announcement, adding more insult to injury about the state of the company?

If anything, look for Verizon to take a strong look at buying Sprint Nextel shortly after its deal with Alltel closes. There would be way more regulatory scrutiny than the Alltel deal (overlapping markets, etc.), but a one-two knockout punch like this would make Verizon Wireless the pre-eminent wireless carrier in the U.S. for a long time. AT&T would have no choice but to plead with Deutsche Telekom to buy T-Mobile USA, the nation's fourth-largest wireless carrier, and one who also shares the same type of technical network as AT&T. Perhaps 2009 will see some of the neatest consolidation in the wireless world yet.

Readers of this space know that the investment bias is toward large-cap companies with demonstrated business models and who have a competitive advantage in established markets, preferably with a favorable global trend as a support. But every once in a while an exception is made, and with the aforementioned in mind France Telecom is worth a review.

France Telecom SA (ADR) (NYSE: FTE) is a major telecommunications provider in France and also operates broadband, IP protocol, and audio-visual content businesses.

Analysts really like FTE's 49% market share of France's broadband market. Analysts also expect France Telecom's broadband business to offset a decline in landline telephone revenue in FY 2008.

AT&T Inc. (NYSE: T) today posted strong first quarter results thanks to the continuing popularity of the iPhone and its ability to squeeze more savings from the BellSouth merger.

Net income rose to $3.46 billion, or 57 cents a share, from $2.85 billion, or 45 cents. Sales climbed 6% to $30.7 billion. On an adjusted basis, profit was 74 cents. The results matched the estimates of analysts surveyed by Thomson Financial, which in this market is good news. Shares of the telecommunications company were trading up in early morning market action.

"Revenue growth continues to ramp, we have good momentum across key growth areas, major cost initiatives are on track, and our operational results reinforce the confidence we have in our outlook," said Chief Executive Randall Stephenson in the earnings release.

Among the highlights:

• Total wireless revenue increased 18.3% year-over-year to $11.8 billion. Wireless service revenue, which excludes handset and accessory sales, grew 17.1% to $10.6 billion. Growth was driven by strong subscriber gains and continued improvement in ARPU (average monthly revenues per subscriber).
• Wireless data revenues grew 57.3% to $2.3 billion, reflecting surging demand for Internet access, e-mail, messaging, data access and media bundles.
• The first quarter net gain in wireless subscribers totaled 1.3 million. AT&T ended the quarter with 71.4 million subscribers.
• AT&T's broadband revenue grew 13.2% in the first quarter to $1.4 billion.
• Total video connections, which include AT&T U-verse service and bundled satellite television service, increased by 264,000 to 2.6 million.

The mean price target of Wall Street analysts is $44.39, well above where it currently trades. Perhaps investors are expecting the next earnings report to show signs of a slowdown.

It's a dog-eat-dog world out there in the competitive landscape of telecommunications, and often the most intuitive, user-friendly, aesthetically pleasing device takes top honors. For years, the BlackBerry, brainchild of Research in Motion Limited (NASDAQ: RIMM) was THE device to have for yuppies on the go and young adults in need of a 24/7 e-mail fix. Then came Apple (NASDAQ: AAPL)'s iPhone and other hot devices to battle the BlackBerry's dominance.

Today, RIM officials stepped up the competition, announcing new features to boost the ease and improve the service of BlackBerry's wireless e-mailing. According to an article in this morning's Wall Street Journal, BlackBerry users will "soon be able to edit documents directly from the handheld device and to view messages in their original formatting."

In an effort to keep bottom-line growth alive, Intel is trying (again) to move into the mobile phone market. Speaking from the Consumer Electronics Show in Las Vegas, the Pentium parent's CEO, Paul Otellini, told Bloomberg that Intel is focused on "where we think phones are going, not where they are today."

Last year, Otellini put to rest his predecessor's $5 billion, six-year effort to produce mobile-phone chips designed to run the communications features of cellular phones. Now, the Intel CEO is taking a different approach to the new marketplace, designing chips for phones that can surf the web and master mobile video and music. The goal for the new chip is to provide increased processing power while exerting less electricity.

In the first half of 2008, Intel will be unveiling its package of mobile chips. A successful shift toward this technology could be a boon for the company, as mobile handsets currently outsell personal computers by a 4-to-1 margin.

Shares of AT&T Inc. (NYSE: T) had their biggest decline in more than 5 years after the largest phone company warned of "softness" in its consumer business and that more of its customers have had their service disconnected for failing to pay their bills.

In late afternoon trading, the exclusive seller of the iPhone, was down $3.51, or 8.6%, to $37.52. The company's mobile phone and corporate business has not been hurt by the slowdown, Bloomberg News quotes Chief Executive Randall Stephenson as saying.

Shares of AT&T have jumped 12% over the past year. This year, though, the picture is different. The Nasdaq Composite Index has plunged about 8% in the early days of 2008 amid declines by stalwarts such as Google Inc. (NASDAQ: GOOG), Apple, Inc. (NASDAQ: AAPL) and Microsoft Corporation (NASDAQ: MSFT). AT&T has dropped almost 9%. The tech index hasn't had a positive day yet this year.

What's going on here? I don't think it can all be profit taking. Investors seem to be concerned that the slowdown in consumer spending will hit corporations as well. That won't be clear for another few months. It certainly kills some of the buzz from the Consumer Electronics Show.

Imagine a global cell phone network. Now imagine a global cell phone network for a low monthly fee.

True, a system of that sort is not likely to happen overnight, but a company that's headed in that direction is United Kingdom-based Vodafone Group Plc (NYSE: VOD).

Vodafone Group is the world's leading mobile telecommunications company, with a substantial presence in Europe, the Middle East, Africa, Asia/Pacific and the United States.

Along with VOD's strong balance sheet and solid dividend, analysts like Vodafone Wireless, the company's most profitable division, which contributes 22% of operating earnings. About 80% of VOD's revenue is Europe-based, a maturing market, so VOD has beefed-up its emerging market expansion plan with asset purchases in India and Turkey.

Cable shares were beginning to get back on track. FCC plans to further regulate the industry never made it off the ground. It looked like the the industry had clear running.

But, Comcast (NASDAQ: CMCSA) issued a profit warning saying that its cash flow in 2007 might be only 80% of what it was last year. The number of subscribers it expected to sign up would fall from previous forecasts and capital spending on new infrastructure would rise. Barron's reports "the company now sees revenue generating units up about 6 million, to 57 million, rather than previous guidance of 6.5 million unit growth. Comcast now sees cable revenue growth of about 11%, down from previous guidance of at least 12%."

It appears that Wall Street was right when it began to fear the worst about fiber-to-the-home competition from telephone companies. The new technology allows them to offer fast broadband, HDTV, and voice service in one package. For several years only cable could do that. Now the telecoms, lead by Verizon (NYSE: VZ), are aggressively offering their own packages.

For investors, the problem is that new competition is likely to keep cable stocks down for a long time. That means that the lows that they hit recently may be as good as it gets.

Douglas A. McIntyre is an editor at 247wallst.com.

Globecomm Systems Inc. (NASDAQ: GCOM), provider of satellite-based communications infrastructure, including both hardware and software, hit a high for the year on 15 October, closing at $16.04, up $0.91 for the day. The rise in stock price comes on the heels of two recent contract awards. Globecomm has joined with the National Hockey League (NHL) to provide streaming feeds of up to 30 simultaneous games to subscribers of NHL's Center Ice package. In a completely different venue, Globecomm also won a contract from the National Oceanic and Atmospheric Administration (NOAA) to build a networked prototype so that all weather-related information, particularly information on hazardous weather, can be merged into one location.

As a results of these contracts, and the acquisition of Global Sat earlier in the year, Globecomm posted a month ago record revenue for both fiscal 4Q 2007 as well as for FY 2007. For the fiscal 4Q, Globecomm posted revenues of 49.2 million, an increase of 38%. Revenue is divided into 2 segments: infrastructure solutions revenue, which was up 29%, and service revenue, which increased 77%. The results are the same for FY 2007. Revenue increased 20% to $150.7 million, with service revenue increasing over 28%.

CFO David Herschberg predicts that Globecomm will post record revenues of $190-$200 million in FY 2008, with diluted EPS of $0.70. Such rsults are entirely possible. Globecomm won part of a 5 year, $5 billion US Army telecommunications contract, as well as a NATO contract to develop a friendly-forces tracing system to prevent friendly-fir deaths. Globecomm has been in Asia constructing a $26 million media processing center. Although on a much smaller scale, Globecomm is beginning to rebuild the telecommunications infrastructure in Afghanistan, and bring wireless communications to rural Alaska.

The stock opened the year trading at $8.85 and is on its way to doubling in 10 months, with no signs of slowing down. In a few months, the current share price of $16 may seem like a real bargain.

Visit AOL Money & Finance for more earnings coverage

No, that's not a teaser from Motley Fool. Spectrum Control Inc. (NASDAQ: SPEC), maker of electric components for aerospace and telecommunications use, began the year trading at $9.92. The stock reached a high of $17.78 in mid July before losing some ground. This prompted company director James Tooley to sell 20,000 shares for $292,000 on 28 September. Turns out he should have held on, as the stock closed on 9 October at $17.15, having gained $2.60 since Tooley sold and the company reported good 3Q earnings. Don't feel too bad for Mr. Tooley. He still owns 33,442 shares of Spectrum Control, which shows no signs of losing ground in the near future.

Spectrum Control is organized into four business units, three of which showed little to no increase in revenue in 3Q 2007 earnings, primarily due to flat sales caused by a slow down in defense contracts spending. Nonetheless, long-term growth prospects look good for Spectrum as sales increased 73%, to $5.4 million, in the company's Sensors and Controls unit. This growth in sales was driven by both acquisitions and organic growth, especially as the company expands its product applications in medical and meteorological instruments. For the year so far, sales in this unit are up 126% to $15.5 million.

Given the growth in the snesors and control unit, Spectrum CEO Dick Southworth forecasts 4Q 2007 sales to be $35.5 - $36.5 million, or EPS of $0.24-0.26, a 60% increase. Everybody needs a few microcaps in the portfolio. This one looks interesting.

Forget Fake Steve Jobs. The fake iPhone is here. According to Bloomberg, there is the beginning of a booming market for counterfeit Apple (NASDAQ: AAPL) iPhones in Taiwan and China. "With a touch-screen and Apple Inc.'s logo on the back, the iClones look just like the real thing," the story says.

Apple will probably not offer the iPhone in Asia until next year.

The news points out the Chinese dexterity in stealing consumers electronics designs and it is a significant threat to Apple. China has the world's largest cellphone market and China Mobile (NYSE: CHL) is the world's largest cellphone company. And, the phones are being sold into markets including Australia and the U.S.

The fake phones have two advantages. First, they are less expensive than iPhones. Second, they can work on networks outside AT&T (NYSE: T), which currently has the U.S. exclusive for the hot handset.

Steve Jobs may want to take a look over at Microsoft (NASDAQ: MSFT), which claims that about 85% of the copies of Windows sold in China are counterfeit. That represents hundreds of millions of dollars in lost revenue, perhaps more.

Now, it's Apple's turn to fight the pirates.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Since the story ran at BusinessWeek.com, it has some credibility. The online version of the magazine reports that Apple (NASDAQ: AAPL) is considering joining the government's auction of wireless spectrum, putting it in potential competition with Google (NASDAQ: GOOG).

Apple certainly has the $4.6 billion needed to enter the bidding, but the magazine says that the low margins in running a large wireless network might keep the consumer electronics company away. However, if Apple did succeed in the auction, it would have its own network for the iPhone. As a potential attraction, the company could allow its handset to use inexpensive VoIP.

Apple may have a longer-term reason to look at the spectrum. At some point, its sales of iPhones and iPods will slow in the U.S. But, having a service network would allow the company to combine video, music, and voice onto one platform, which could extend the sales life of its current products.

Another attraction might be the scale of the opportunity. Verizon Wireless will bring in about $40 billion this year. And, it is highly profitable. Offsetting that is the costs that were necessary to build out the infrastructure to support those revenues. But Apple might end up in a partnership with another company, say Google, to share those costs.

It may seem crazy, but so is the success of the iPod.

Douglas A. McIntyre is a partner at 24/7 Wall St.

The New York Times [registration required] reports that Dave Stolte took his Apple Inc. (NASDAQ: AAPL) iPhone to Ireland and England in July and returned home to a little surprise -- a bill for $3,000.

Stolte's $3,000 phone bill was a result of unanticipated European roaming charges. Consider the case of mortgage consultant, Neil Dingman. Dingman used his iPhone only a few times on a European trip this summer and had expected to see just a small increase in his next bill for roaming charges. But he failed to turn off an iPhone feature that automatically checks e-mail. Thus his iPhone roamed over networks in Italy, Croatia and Malta more than 500 times. And he ended up with $852.31 in roaming charges.

But Stolte's story has a happy ending. Thanks to the posting of Stolte's bill on the Internet, AT&T Inc. (NYSE: T) went from giving him a $100 credit to full credit for that $3,000 iPhone bill. The lessons? Turn off the e-mail checking feature if you're out of the U.S. And if you get a ginormous iPhone bill -- post a complaint video on Google Inc.'s (NASDAQ: GOOG) YouTube.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the stocks mentioned.