- AT&T (T -1.1%) reports earnings after the bell, in a closely watched report since the company pre-announced heavy video subscriber losses along with updates about handling network damage from natural disasters.
- In a preview note, Wells Fargo (NYSE:WFC) says it expects a focus on the impending takeover of Time Warner (NYSE:TWX), as well as some color behind a promise of more competitive aggression from the company and capital spending updates.
- As for video subs, the decline in AT&T's linear business was mitigated by adds on its DirecTV Now streaming product, but "there remain question as to how many customers are actually paying for this," Wells says. On wireless, "we expect a slower iPhone refresh cycle to impact adds in Q3 (this is consistent commentary with both TMUS and VZ)."
- MoffettNathanson says the video sub loss signals cord-cutting and a weak quarter for the whole pay TV industry. When Comcast (NASDAQ:CMCSA) gave weak guidance for Q3 video subs, it wasn't due to AT&T's competition, the firm says, but cord-cutting and streaming services affecting both companies.
- Meanwhile, Goldman Sachs (NYSE:GS) has trimmed its expectations for Entertainment Group revenue by $491M -- to $2.28B -- to account for AT&T's announcement on video subs.
- Options activity is pointing to a 2.7% move after the bell, larger than a historical mean of 1.8%, Bloomberg notes. Most widely held Oct. 27 options are $35.50 calls, $36 calls and $37 calls; AT&T is currently trading at $34.85.
- Street consensus is looking for EPS of $0.74 on revenues of $40.12B, and EBITDA of $13.39B.
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