AT&T Analysis: Dow Earnings

BOSTON (TheStreet) -- AT&T (T) has reported quarterly results.

Quarterly Synopsis: AT&T's fourth-quarter 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%, on a GAAP basis. Fourth-quarter net income dropped to $1.1 billion, or 18 cents a share, hurt by a slew of one-time items, including a 26 cent charge from a pension accounting change, a nine cent charge for severance costs and a two cent charge for asset impairments. 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 2011.

Earnings Performance: AT&T 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 and has an average earnings beat rate of 5.9%. AT&T's stock fell 3% on the report.

Dividend Information: AT&T pays a quarterly dividend of 43 cents, translating to a yield of 6.2%, among the highest in the Dow. The company has boosted the distribution 2.4% in the past 12 months and 4.9% and 5.4% annually, on average, over three- and five-year spans.

Analyst Opinions: Of analysts evaluating AT&T, 22 advise buying its stock and 17 recommend holding it. None say to sell. The stock has a median target of $31.50.

Credit Suisse, Outperform, $35 Target
JPMorgan, Overweight, $33 Target
Deutsche Bank, Buy, $33 Target
Barclays, Equal Weight, $32 Target
Goldman Sachs, Neutral, $32 Target
UBS, Buy, $31 Target
Citigroup, Hold, $31 Target
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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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