AT&T’s Stock Could Be a Great Bargain for Investors
AT&T Inc. (NYSE:T) reached a new 52-week low on Tuesday as the company released its third-quarter earnings which failed to impress investors. AT&T’s revenue of $39.67 billion fell short of the $40.10 billion that was expected. Year-over-year, sales were down 3% as the company saw a decline in its legacy wireline services as well as its consumer mobility segment. Earnings per share of $0.74 also fell short of estimates, just narrowly missing the $0.75 that was expected by analysts.
AT&T also add less wireless customers than was expected, although their postpaid churn rate of 0.84% was well below the 1.08% estimated by analysts.
Despite a soft quarter, AT&T did not adjust down its guidance for 2017.
The stock was only down 1% on the disappointing results, but this is because earlier in the month AT&T’s stock declined 6% when the company sent out a warning stating that it was going to show a net loss of 90,000 video subscribers in the coming quarter.
Had the company not sent out that warning, we likely would have seen more of a decline in the share price. However, there is reason for optimism with the company still working on closing its acquisition of Time Warner Inc (NYSE:TWX), which will further expand its offerings and solidify a stronger grip on the market.
With a dividend of 5.6% and a price to earnings multiple of just 16, AT&T might be a great buy coming off a poorer than expected earnings result. Over the long term the future should present plenty of opportunities for growth that will more than offset any short-term struggles.