When the markets close on Wednesday, AT&T Inc. (NYSE:T) will announce its fourth-quarter results. And yes, there will likely be much for investors to chew on. Keep in mind that AT&T stock has already had a nice run lately, up nearly 14% since mid-November.
For the quarter, the Wall Street consensus is for revenues of $42.04 billion and earnings of 66 cents a share on T stock. Granted, AT&T earnings generally do not stray much from the averages. So it’s probably a good bet not to see much price action.
But interestingly enough, AT&T has already provided some important details on the quarter, which came from an SEC filing on Friday.
First of all, the company disclosed that there were 900,000 U.S.-branded mobile net additions (the breakdown included 500,000 postpaid and 400,000 prepaid). This was certainly better than the performance in the prior quarter, in which AT&T reported a loss of 268,000 mainstream wireless phone customers. It appears that AT&T is finding ways to help beat back some of the intense competition from players like Verizon Communications Inc. (NYSE:VZ), Sprint Corp (NYSE:S) and T-Mobile US Inc (NASDAQ:TMUS).
Next, AT&T is getting some nice traction from its new streaming service, DirecTV Now. While there have been reports of outages and glitches, the company has still been able to add more than 200,000 new subscribers since the launch in late November.
Granted, part of this was due to deep discounts. But it is encouraging that AT&T is making bold moves with new product offerings. And even without the discounts, DirecTV Now starts at only $60 a month and has a strong set of content offerings from providers like Twenty-First Century Fox Inc (NASDAQ:FOXA), Walt Disney Co (NYSE:DIS) and Time Warner Inc (NYSE:TWX).
Of course, the play is for those customers that have been cutting the cord on cable television. No doubt, the market potential is enormous as seen with the success of Netflix, Inc. (NASDAQ:NFLX).
Going forward, there will likely be more innovative initiatives as well. Keep in mind that the company holds over 12,500 patents and has thousands of talented engineers.
There is also the tremendous advantage of the massive AT&T network, which can leverage the company into growth markets like cloud computing and the Internet of Things (IoT).
AT&T Stock and the TWX Deal
Investors in AT&T stock will also want to get a sense of the progress of the pending $85 billion acquisition of TWX — a deal Donald Trump has already criticized.
Yet it still seems like a good bet there will be approval. After all, the Justice Department would have a hard time making an argument that the deal would be anti-competitive, since both T and TWX are essentially in different industries. And besides, the CEO of AT&T recently met with Trump and it appears it was fairly amicable.
Although, there will still likely be some asset spin-offs, say with the CNN business.
It’s important to note that AT&T has a fairly good track record with mega acquisitions. Just look at the $50 billion deal for DirecTV, which has already resulted in the streaming service as well as a bolstering of the subscriber numbers.
But again, AT&T stock will probably not move too much on the upcoming earnings report. And then again, the play is probably more a long-term one anyway. Let’s face it, AT&T has the advantage of enormous cash generation, which allows for an attractive 4.7% dividend yield.
What’s more, for investors looking for a stable play with exposure to key markets like mobile and emerging categories like the IoT, AT&T stock still looks like an attractive bet.
Tom Taulli runs the InvestorPlace blog IPO Playbook and also is the developer of an iOS app for taxes. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.