Earnings Preview: AT&T to report 3Q results

NEW YORK (AP) ? AT&T Inc., the largest telecommunications company in the U.S., reports results Thursday before the stock market opens

WHAT TO WATCH FOR: AT&T was in a holding pattern in the third quarter. It’s usually an important one for the carrier, since there’s been a new iPhone at the start of the quarter or just before it for the last four years. But this year, the launch of the new iPhone model was delayed until last week, after the end of the third quarter.

That means analysts are looking for business-as-usual results from AT&T. Still, the number of new subscribers on contract-based plans will be closely watched. Customers who sign contracts are the most lucrative for the carriers, and AT&T has been a leader in attracting them, thanks to the iPhone.

This year, however, the number of new subscribers has been curtailed sharply, as Verizon Wireless started selling the iPhone in the first quarter. For AT&T, that meant it gained just 62,000 net new subscribers on contract-based plans that quarter, about one-tenth of what it gained in the previous quarter.

Recruitment improved in the second quarter to 331,000, and analysts are now expecting AT&T to post about 400,000 additions for the third quarter.

On the company’s post-earnings conference call, analysts will be listening for comments on AT&T’s bid to buy No. 4 wireless carrier T-Mobile USA for $39 billion. AT&T was dealt a major setback this quarter when the Justice Department sued to stop the deal, saying it would reduce competition in the industry and raise prices for consumers.

WHY IT MATTERS: Dallas-based AT&T had 87.6 million wireless customers (excluding some low-revenue customers, like those using Kindles) and 41.3 million landlines at the end of the last quarter. The company’s stock is a component of the Dow Jones industrial average.

WHAT’S EXPECTED: Analysts polled by FactSet expect AT&T to post earnings of 61 cents per share on revenue of $31.62 billion.

LAST YEAR’S QUARTER: AT&T originally reported a profit of $2.08 per share, helped by a tax settlement and the sale of a subsidiary. The figure was retroactively reduced by a penny under a new pension accounting method. Excluding the one-time effects, earnings were 55 cents. Revenue was $31.6 billion.