2017-10-18 13:15:03 | On The Fly: What to watch in telecom sector earnings reportsVerizon (VZ) is scheduled to report quarterly results before the market opens on October 19, while AT&T (T) scheduled to report on October 24. Neither T-Mobile (TMUS), nor Sprint (S) have disclosed the dates for their respective quarterly results and earnings conference calls, as those releases should coincide with the announcement of their merger agreement, which is expected later this month. What to watch for: 1. OUTLOOK: When Verizon reported its second quarter results on July 27, it announced that it sees 2017 organic revenue "fairly consistent" with 2016, with improvement in wireless service revenue and equipment revenue trends. On October 11, AT&T reiterated its fiscal 2017 adjusted earnings growth guidance in the mid-single digits. The company also backed FY17 adjusted consolidated operating margin expansion, capital expenditures in the $22B range, and free cash flow at the low end of the $18B range. 2. T-MOBILE/SPRINT MERGER: On October 6, Bloomberg reported that Sprint and T-Mobile are working out the final details on a merger agreement, which should be announced at the end of the month. On October 13, Nikkei reported that the merger agreement could be announced soon, citing a broad pact reached with SoftBank (SFTBF), which owns 83% of Sprint. Nekkei added that Deutsche Telekom (DTEGY) owns 64% of T-Mobile. On October 16, Reuters reported that, according to people familiar with the matter, the companies plan to announce the merger without any immediate asset divestitures in order to preserve their spectrum holdings. 3. PIXEL 2: During the Made by Google conference on October 4, Google (GOOG, GOOGL) announced that Verizon will be the exclusive wireless partner for the Pixel 2 and Pixel 2 XL. Not willing to concede that exclusivity to Verizon, T-Mobile announced the "Unleash your Pixel 2" campaign, offering to pay up to half of the purchase price of a Pixel 2/Pixel 2 XL if customers bring their new Google handset to T-Mobile and get a new voice line. 4. AIM SAYS "GOODBYE": On October 6, Oath, a Verizon company, announced that AOL's Instant Messenger will be discontinued on December 15. | |
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