Summary
- AT&T will be reporting its Q3 earnings on October 28.
- Investors should closely monitor its subscriber growth and the churn rate in its mobility segment, and also closely watch subscriber losses and ARPU growth in Entertainment Group.
- These items are likely going to determine where the company and its shares head next.
AT&T (T) is scheduled to report its Q3 earnings on October 28. Analysts are forecasting its revenue and EPS for the period to come in at $45.06 billion and $0.93 per share, respectively. But rather than focusing just on the headline figures, investors should also closely monitor the operational and financial performance of its Mobility and Entertainment Group divisions. These are AT&T’s two largest segments, so any material fluctuations in their reported numbers will determine where the company's shares head next.
(Source: Bigstockphoto, Image license purchased by author)
Mobility Subscriber Trends
Let me start by saying that AT&T’s Mobility division has, so far, played a vital role in providing stability to the overall business. It accounted for a significant 38% of the company’s overall revenue and about 50% of its overall adjusted EBITDA during Q2. Given its huge revenue and EBITDA contribution, I think it’s understood that any fluctuation in the segment’s financials, good or bad, would have a prominent impact on the telecom giant’s consolidated financials. So, investors should track this segment’s numbers closely.
(Source: Business Quant)
Specifically speaking, AT&T has seen its postpaid subscriber base shrink in the past two quarters. The chart below would indicate that its postpaid subscriber base is the largest in all of its mobility segment. So, the first key item to watch here is the company's postpaid subscriber losses - will the losses continue, or will the number start to grow in the coming quarter?
