There are more than a few skepticisms about AT&T shares. In the short term, the earnings report is 3 days away. With Verizon's foot in the iPhone market, I will assume revenue will take a hit. Medium term, the merger greets skeptics. Is AT&T reserving that $39 billion, one third of last year's revenue? Prepaid mobile is getting hot; Metro PCS and Sprint are catching fire. AT&T has to play catch up again. Speaking of catchup, where is 4g? AT&T estimates deployment in Q3 2011. There's also the fiber cable upgrades to compete with Comcast. Can AT&T, comprised of 250,000+ employees, really keep up with all this?
Rather approaching this with optimism, I want to be paranoid when analyzing any company's stock at this time. The current snapshot of global economics has to assume crude oil, soft commodities, and hard commodities will continue to climb. Additionally, the U.S. dollar will sink deeper into yearly lows. The Federal Reserve System will stop printing money and government will be distracted by the budget and elections. It made perfect sense to see the increase in producer price index and consumer price index. The only reason why the market seemed happy was because the increase was not that substantial compared to what was estimated. Technical analysts will continue to pump hope, but the all the warning signs are in plain sight.
I expect a miss this quarter. I don't expect a raise in dividend. I also expect this stock to drop until September. This has nothing to do with my holdings in Sprint. I just do not see AT&T thriving with these current conditions even with that attractive yield. Correct me if I'm wrong, CEO Mr. Stephenson. Tell me how you plan to remove the reputation of dropped calls and a below par network from this once premier company. Line up that buy back schedule if you want to appease your shareholders.
A storm is brewing on Wall Street. 12 hours away...
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