When AT&T and Verizon Communications report fourth-quarter earnings next week, their 2022 outlook will be key amid recent transactions. AT&T stock has gained 8% in 2022 while Verizon stock has advanced over 2% amid a rotation out of technology companies.
Verizon reports before the market open on Jan. 25. AT&T follows on Jan. 26. T-Mobile US reports after the market close on Feb. 2.
In the December-ended quarter, per-share earnings for Verizon stock are expected to rise 6% to $1.29, with revenue falling 2.3% to $33.9 billion.
The telecom firm recently closed the acquisition of TracFone, which sells prepaid wireless services. Analysts will look for Verizon to update wireless profit margin guidance, taking into account the TracFone deal.
"There are many moving parts to Verizon's 2022 outlook, between the TracFone integration, C-band roll-out and impact of the Media Group divestiture," said Wells Fargo analyst Eric Luebchow in a report. "We continue to think adjusted EPS will be relatively flat in 2022, before rebounding to 3% growth in 2023."
Verizon bought TracFone from America Movil for $6.5 billion. The deal made Verizon the biggest provider of prepaid phone services.
Verizon Stock: Postpaid Phone Subscriber Growth
One issue for all three national wireless service providers is whether subscriber growth will slow in 2022. Analysts estimate that Verizon added 588,000 postpaid phone subscribers during the fourth quarter.
AT&T and T-Mobile in early January pre-announced wireless postpaid phone subscriber results for the period. AT&T added 880,000 postpaid phone subscribers, topping estimates of 804,000.
T-Mobile added 844,000, slightly below estimates of 854,000. T-Mobile stock fell on the news.
Analysts estimate that AT&T will report profits of 76 cents a share, up a penny from a year earlier. Revenue is expected to fall nearly 12% to $40.3 billion due largely to AT&T spinning off satellite TV broadcaster DirecTV to private equity firm TPG Capital.
AT&T Stock: Discovery Deal To Close
Also, AT&T has agreed to merge its WarnerMedia business with Discovery. The deal could close in the second quarter of 2022.
It's unclear whether AT&T will keep shares in the new company, to be called "Warner Brothers Discovery," or distribute its stake in the merged media firm to AT&T shareholders. AT&T management may address the issue on its earnings call with analysts.
The earnings reports of Verizon stock and AT&T stock kick off telecom company earnings. When T-Mobile reports on Feb. 2, analysts will look for an update on its plans for a stock buyback. T-Mobile also may offer an update on its post-merger consolidation efforts with Sprint.
AT&T stock dipped 1.5% to 26.61 on Friday. Verizon stock slipped a fraction to 53.16. T-Mobile dropped 2.3% to 101.62.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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