After An Initial Dip Following Earnings, AT&T Stock Is Dialing Up Gains In Today's Session

Shares of AT&T Inc. (NYSE: T) gained more than 1 percent after the telecom major reported solid second-quarter results.

Quarterly Results

The company reported consolidated revenue and EPS of $40.5 billion and $0.72 compared with Baird's estimate of $41.1 billion and $0.73, respectively. The $0.72 EPS came in line with Street, while the revenue missed the consensus number of $40.63 billion.

Baird said DTV net additions beat forecasts, although the company still lost total TV customers and continued to lose post-pay phone subscribers.

"Though positive on the 4.5 percent dividend yield, we view valuation as fair in light of competitive challenges, and are maintaining our Neutral rating," analyst William Power wrote in a note.

Related Link: AT&T Offers Network Connectivity To Array Of Things Project

AT&T believes it's on track to reach $1.5 billion in annualized DTV synergies by year-end, and $2.5 billion in 2017. Management also laid out a roadmap for $20 billion in FCF by 2020 versus an approximated $16 billion in 2016.

The company added 342,000 DTV customers, above the first-quarter and year-ago loss. However, total TV subscribers declined by 49,000 due to U-verse TV losses.

A Look Forward

Looking ahead, the company sees 2016 revenue and adjusted EPS of $164.8 billion and $2.85, respectively. Power, who has a price target of $41, cut his 2016 EPS estimate to $2.85 from $2.87.

Separately, Morgan Stanley has recommended AT&T as part of its review of telecom sector.

Related Link: Morgan Stanley Remains Cautious On Telecom Services Sector

AAT&T shares were up 1.35 percent at $43.08 minutes before Friday's closing bell.

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