Analysts don't expect AT&T T to deliver a positive quarter on a year-ago basis until the third quarter of 2009.
Yet that appears to say more about the economy than it does about AT&T.
Consider the fundamentals:
Operating cash flow per share is 131% greater than EPS -- far above the desired 20% figure.
Pretax margin is 21.4%, the best since 2002.
Return on equity, a measure of financial efficiency, is 14.7%. That's a bit low by growth stock standards. Still, it's AT&T's best since '02.
The five-year growth rates are 18% for earnings, and 31% for sales.
The EPS Stability Rating is 10 on a scale that runs from 1 (calm) to 99 (erratic).
While the stock trades about 37% off its high, it is taking a stab at regaining its 10-week moving average and has risen in four of the previous five weeks.
The dividend yield is just under 6%. The payout ratio is about 54% of estimated 2008 earnings.
AT&T remains a mix of landline (about 56% of Q3 sales) and wireless business. It's gained some heft, however, as the iPhone provider.
In the third quarter, there were 2.4 million iPhone activations. About 40% were new customers.
Because the wireless business is a mature market, keeping customers is essential.
AT&T's total churn rate in Q3 was 1.7%, even with the year-ago quarter.
At the earnings call on Oct. 22, Ralph de la Vaga, chief of AT&T Mobility, said that the iPhone is delivering "very high-quality customers."
De la Vaga says there is a "halo effect" from the iPhone. Same-store traffic in Q3 was up 15% vs. the year-ago period.
Source: Investor's Business Daily
