The firm delivered 55 cents of adjusted earnings, up 7.8% year-over-year, exceeding Wall Street's consensus estimate by 2%. It has exceeded earnings targets for four consecutive quarters. Consolidated revenue inched up 2.1% to $31 billion, but operating income dropped from $4.6 billion to $2.1 billion as the margin more than halved to 6.7%. The company achieved $3.1 billion of free cash flow in the quarter, with $9.6 billion of operating cash flow and $6.6 billion of expenditures. Management expects mid-single digit earnings growth during fiscal 2011.
12-Month Sales Growth: 1.4%
12-Month Profit Growth: 64%
12-Month Stock Performance: 7.8%
3-Year Annualized Sales Growth: 1.5%
3-Year Annualized Profit Growth: 18%
3-Year Annualized Stock Performance: -10%
3-Year Annualized Dividend Growth: 4.8%
5-Year Annualized Dividend Growth: 5.4%
Bullish Scenario: Credit Suisse rates AT&T "outperform", expecting its stock to rally 26% to $35. Bearish Scenario: Sanford Bernstein ranks AT&T "market perform", predicting a drop of 10% to $25.