) is slated to report its fourth-quarter 2013 results on Jan 28
after the market closes. In the last quarter, the company
delivered a 1.54% earnings surprise. Let's see how things are
shaping up for this announcement.
Why a Likely Positive Surprise?
Our proven model shows that AT&T is likely to beat
earnings because it has the right combination of two key
which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, stands at +2.00% for
AT&T. This is a meaningful and leading indicator of a likely
positive earnings surprise.
AT&T currently has a Zacks Rank #3 (Hold). Note that stocks
with Zacks Ranks of #1 (Strong Buy), 2 (Buy) or 3 have a
significantly higher chance of beating earnings.
The combination of AT&T's Zacks Rank #3 and +2.00% ESP
makes us confident of an earnings beat this release.
What is Driving the Better-Than-Expected
We expect the company to experience strong momentum in both
wireline and wireless businesses. Unprecedented demand for
smartphones and tablets is fueling wireless business growth.
Wireline is also improving with continued growth in its U-verse
and strategic services.
Further, AT&T remains a leader in WiFi (wireless
broadband) connectivity, which will be accretive to its growth.
We also remain encouraged over AT&T's proposed acquisition of
Leap Wireless, which will boost its prepaid division. However,
spectrum crunch and continuous loss of access lines pose major
impediments to the company's growth story.
Other Stocks to Consider
Here are some other companies to consider as our model shows
these have the right combination of elements to post an earnings
beat this quarter:
Charter Communications Inc.
) with earnings ESP of +138.10% and Zacks Rank #3.
Frontier Communication Corp.
) with earnings ESP of +16.67% and Zacks Rank #3.
) with earnings ESP of +6.25% and Zacks Rank #3.
CHARTER COMM-A (CHTR): Free Stock Analysis
FRONTIER COMMUN (FTR): Free Stock Analysis
SPRINT CORP (S): Free Stock Analysis Report
AT&T INC (T): Free Stock Analysis Report
To read this article on Zacks.com click here.