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Preview: AT&T's Earnings

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AT&T (NYSE: T) unveils its next round of earnings this Thursday, October 22. Here is Benzinga's everything-that-matters guide for the earnings announcement.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equates to net income divided by the number of shares outstanding.

Earnings And Revenue

Based on management's projections, AT&T analysts model for earnings of $0.76 per share on sales of $41.61 billion. In the same quarter last year, AT&T reported EPS of $0.94 on revenue of $44.59 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

The Wall Street estimate would represent a 19.15% decline in the company's earnings. Revenue would be down 6.68% from the same quarter last year. Here is how the AT&T's reported EPS has stacked up against analyst estimates in the past:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019
EPS Estimate 0.79 0.85 0.87 0.93
EPS Actual 0.83 0.89 0.89 0.94
Revenue Estimate 41.02 B 44.21 B 46.95 B 45.00 B
Revenue Actual 40.95 B 42.78 B 46.82 B 44.59 B

Stock Performance

Shares of AT&T were trading at $26.77 as of October 20. Over the last 52-week period, shares are down 27.69%. Given that these returns are generally negative, long-term shareholders are likely unhappy going into this earnings release.

 

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