Earnings Outlook: AT&T Expected To Weather Storm By Ringing Up iPhone Revenues

As the largest U.S. carriers prepare to report their first-quarter earnings over the next three weeks, investors are looking for clues as to whether the economy has negatively impacted the wireless industry. AT&T (NYSE: T) is expected to be among the most sheltered from the storm, however, because of the draw of Apple’s iPhone, according to MarketWatch.

The two major metrics investors will be looking at is subscriber growth and average revenue per user. MarketWatch has concluded that AT&T will fair well on both those fronts because of the iPhone. While the carrier has spent billions on subsidizing the device to make it more appealing to the mass market, it has also boosted subscriber growth and revenues. For example, the company’s wireless business is expected to add around 1.2 million net subscribers, which is comparable to the year ago period when it added 1.3 million subscribers — and that was a strong economic environment.

On Wednesday, AT&T will be the first of the four major U.S. carriers to report (Apple (NSDQ: AAPL) also announces on Wednesday); Verizon Wireless (NYSE: VZ) will report on April 27; Sprint (NYSE: S) Nextel will report May 4; and Deutsche Telekom (NYSE: DT), which owns T-Mobile USA, will report on May 7.

Here’s a round-up of how analysts expect the companies to do:

AT&T: In the fourth quarter, the company reported adjusted earnings of 64 cents a share. In Q1, analysts expect earnings of 77 cents a share. However, over the last few weeks, only one analyst increased their estimate, while 11 revised their figures down, according to Thomson Financial.

Verizon Wireless: In the fourth quarter, the company reported adjusted earnings of 61 cents a share. In Q1, analysts expect earnings of 59 cents a share. Two analysts upped their forecasts recently, while one revised their figures down, according to Thomson Financial.

Sprint Nextel: In the fourth quarter, the company reported an adjusted loss of 1 cent per share. In Q1, analysts expect Sprint Nextel, which is struggling with subscriber retention, to come close to break-even, with three revising their numbers up recently, and none electing to lower them, according to Thomson Financial.

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