AT&T Earnings: What to Watch

By FeaturesDow Jones Newswires

AT&T Inc. is scheduled to report its fourth-quarter and full-year results after the market close Wednesday. Here is what you need to know:

EARNINGS FORECAST: Analysts polled by Thomson Reuters expect an adjusted per-share profit of 65 cents, down from 66 cents a year earlier.

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REVENUE FORECAST: Analysts expect AT&T to generate $41.19 billion of revenue in the fourth quarter, down from $41.84 billion a year earlier.

WHAT TO WATCH:

TAX-BILL WINDFALL: AT&T expects to reap a cash windfall thanks to the federal corporate tax cut, but the devil remains in the details. The company announced a $1,000 per worker bonus and said it plans to boost capital spending by at least $1 billion this year. That leaves plenty for stock buybacks, dividends, debt retirement or other priorities that will affect shareholders. Rival Verizon Communications Inc. said it would put much of its extra $3 billion to $4 billion in savings this year into paying down debt.

PHONE STATIC: Solid fourth-quarter subscriber reports from T-Mobile and Verizon leave less room for optimism at AT&T, which enjoyed a relatively stable wireless performance in the third quarter. The late 2017 launch of Apple Inc.'s iPhone X made for a more competitive season that could hurt the carrier's results.

CORD-CUTTING:DirecTV keeps losing satellite customers, erasing gains at the company's newer DirecTV Now streaming service. Analysts at MoffettNathanson expect DirecTV to lose 146,000 satellite-TV subscribers in the fourth quarter. Gains at DirecTV Now may offset those losses but profits would still suffer because of the streaming service's lower prices.

ANTITRUST FIGHT: AT&T's ongoing defense of its Time Warner Inc. purchase will do much to decide the telecom company's future, not to mention how other carriers view the risks and rewards of buying media assets. A federal antitrust trial is slated to begin March 19. Any details AT&T provides about the case's progress will interest investors.

Write to Drew FitzGerald at andrew.fitzgerald@wsj.com

(END) Dow Jones Newswires

January 30, 2018 15:50 ET (20:50 GMT)

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