Earlier this week, AT&T Inc. (NYSE:T) released better-than-expected fourth-quarter earnings.
Let’s explore whether or not AT&T’s fundamental health earns it a “buy” recommendation.
AT&T – Company Overview
AT&T is the telecom titan that can trace its roots back to Alexander Graham Bell and the Bell Telephone Company. For nearly a hundred years, AT&T enjoyed a monopoly over phone service in the U.S.
While the government forced a breakup of the company in 1984, AT&T still remains a market leader to this day. In 2014, AT&T returned more than $11 billion to T stock shareholders through share repurchases and dividends.
AT&T – Earnings Rundown
AT&T delivered a mixed fourth-quarter earnings report. AT&T posted adjusted earnings of 55 cents per share, meeting Street estimates. Compared with last year, T stock’s revenues increased 3.8% to $34.44 billion, beating consensus estimates of $34.6 billion.
What really made headlines, though, was AT&T’s fourth-quarter loss of $4 billion, or 77 cents per share, compared to last year’s profit of $6.9 billion, or $1.31 per share. AT&T attributed this loss to an increase in operating expenses.
Full-year revenues totaled $132.4 billion with earnings-per-share of $2.51.
Looking ahead to fiscal year 2015, AT&T expects to deliver continued consolidated revenue growth and earnings growth in the low single-digit range.
AT&T – Current Ratings
Before you buy any stock, you should always run it through my free Portfolio Grader ratings system.T stock currently receives a C-rating for its Quantitative Grade. AT&T could stand to improve its financial metrics.
AT&T outright fails in terms of earnings momentum and sales growth, earnings growth and earnings surprises earn D-grades. AT&T’s analyst earnings revisions and cash flow earn lackluster C-grades. Meanwhile, T stock earns As on operating margin growth and return on equity. Overall, AT&T receives a C for its Fundamental Grade..
As of this post on Jan. 29, I consider T stock a C-rated “hold.”
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
