AT&T, Verizon Q3 earnings on deck: Focus on subscribers' number, cash flow

[AT&T Store New York City]
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When AT&T (NYSE:T [https://seekingalpha.com/symbol/T]) posts third quarter results on Wednesday before markets open and investors will keep an eye on subscriber numbers for the U.S. telecom giant.

Wall Street expects the Texas-based company to post [https://seekingalpha.com/symbol/T/earnings/estimates?period=quarterly] EPS of $0.54 on revenue of $30.88 billion, implying a rise of over 2% during the quarter.

AT&T, in July, added [https://seekingalpha.com/news/4470502-atts-fiber-additions-come-below-expecations-results-manage-to-top-estimates] more wireless subscribers than expected, driven by promotional activities and demand for its high-speed 5G offerings. The stock has gained over 15% so far this year, outperforming the nearly 13% rise in the S&P 500 Index.

“We believe AT&T is strategically well positioned given its stable growth in Mobility and its strategic initiative to expand its fiber passings to 60M homes by 2030, which would make AT&T one of the largest converged providers nationwide,” said KeyBanc analyst Brandon Nispel.

Verizon, in July, also raised its profit forecast for full-year profit and posted a massive topline beat in its second-quarter earnings report. However, the company posted a surprise drop in monthly bill-paying wireless subscribers.

In addition to some key operational metrics to watch, investors would also keep an eye on broader capital allocation and cash flow for both companies.

As wireless competition intensifies amid decelerating subscriber growth, Wells Fargo analyst Eric Luebchow anticipates a surge of promotional activity into Q4, leaving Verizon with the “steepest hill to climb” to get back to higher consumer postpaid phone adds for FY25, while T-Mobile’s and AT&T’s consensus estimates look “achievable.”

The New York-based firm, which gained over 1% so far this year, is expected to post [https://seekingalpha.com/symbol/VZ/earnings/estimates?period=quarterly] EPS of $1.19, while revenue is expected to rise 2% to $34.19 billion during the quarter. Earlier in the month, Verizon appointed Dan Schulman, former chief executive officer of PayPal, as CEO.

Verizon is set to post its quarterly results on October 29, before markets open.

Over the last two years, AT&T has beaten both EPS and revenue estimates [https://seekingalpha.com/symbol/T/earnings/eps-surprise-summary] 63% of the time, while Verizon has beaten EPS estimates [https://seekingalpha.com/symbol/VZ/earnings/eps-surprise-summary] 88% of the time and has beaten revenue estimates 50% of the time.

Over the last three months, EPS estimates for AT&T have seen five upward revisions [https://seekingalpha.com/symbol/T/earnings/revisions], compared to eight downward revisions. Revenue estimates have been revised upwards 13 times versus no downward move.

Meanwhile, Verizon’s EPS estimates have seen five upward revisions [https://seekingalpha.com/symbol/VZ/earnings/revisions], compared to nine downward revisions. Revenue estimates have seen 10 upward revisions versus two downward moves.

MORE ON AT&T, VERIZON

* AT&T: Q3 Earnings Preview, The Reason Why The Market Is Growing Uneasy [https://seekingalpha.com/article/4830348-at-and-t-q3-earnings-preview-the-reason-why-market-growing-uneasy]
* AT&T: The Telecom Giant To Buy [https://seekingalpha.com/article/4830195-at-and-t-the-telecom-giant-to-buy]
* Verizon: Setting The Bar [https://seekingalpha.com/article/4830135-verizon-setting-the-bar]
* T-Mobile overtakes Verizon and AT&T in subscriber growth -- Wells Fargo [https://seekingalpha.com/news/4504835-t-mobile-overtakes-verizon-and-att-in-subscriber-growth---wells-fargo]
* SA Asks: What's the best telecom play right now? [https://seekingalpha.com/news/4503475-sa-asks-whats-the-best-telecom-play-right-now]