Oppenheimer Previews AT&T's Earnings (T)

Oppenheimer & Co. is previewing AT&T's T earnings, which are scheduled to be released tomorrow. In a note to investors, Oppenheimer writes, "AT&T will report 1Q results tomorrow morning before the market opens. We estimate that T will report recurring 1Q11 EPS of $0.57, which matches consensus and is down $0.02 YoY. We are forecasting a sequential improvement in wireless EBITDA service margins to 39.9%, but this is still down 460bp YoY as smartphone subsidies continue to take a toll on margins. We are forecasting 1.9M net adds for the quarter, but given the loss of iPhone exclusivity (causing lower gross adds and slightly elevated churn), we are projecting a break-even quarter in terms of postpaid net additions (down from 400K in 4Q10). However, we believe that ARPU trends will be solid for the company and the industry and that margins will continue to improve." Shares of T lost 34 cents yesterday to close at $30.31, a loss of 1.1%.