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Friday, January 27, 2012

AT&T stock, earning forecast 2012

AT&T stock, earning forecast 2012 ; AT&T Inc., the largest U.S. phone company, predicted 2012 earnings that trailed analysts' estimates as record demand for smartphones such as the iPhone drive up subsidy costs. The carrier projected "mid-single-digit or better earnings growth" for 2012. Analysts predicted 11 percent on average. Dallas-based AT&T also reported a fourth-quarter net loss of $6.68 billion because of a pretax charge of about $4 billion for the failed takeover of T-Mobile USA, and expenses for revaluing benefit plans and other assets.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), AT&T beat slightly on revenues and missed on earnings per share. Compared to the prior-year quarter, revenue increased and earnings per share dropped to a loss. Margins shrank across the board.

Revenue details
AT&T notched revenue of $32.50 billion. The 28 analysts polled by S&P Capital IQ anticipated revenue of $31.98 billion. Sales were 3.6% higher than the prior-year quarter's $31.36 billion.

EPS details
Non-GAAP EPS came in at $0.42. The 32 earnings estimates compiled by S&P Capital IQ averaged $0.43 per share on the same basis. GAAP EPS were -$1.12 for Q4 versus $0.17 per share for the prior-year quarter.

Margin details
For the quarter, gross margin was 46.2%, 910 basis points worse than the prior-year quarter. Operating margin was -18.7%, 2,500 basis points worse than the prior-year quarter. Net margin was -20.5%, 2,380 basis points worse than the prior-year quarter.

Looking ahead 2012
Next quarter's average estimate for revenue is $31.78 billion. On the bottom line, the average EPS estimate is $0.59. Next year's average estimate for revenue is $127.95 billion. The average EPS estimate is $2.43.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 5,351 members out of 5,793 rating the stock outperform, and 442 members rating it underperform. Among 1,274 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,211 give AT&T a green thumbs-up, and 63 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on AT&T is outperform, with an average price target of $31.56.

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