AT&T (T) Drops Off During Wednesday's Session

Updated to include information regarding AT&T ex-dividend details.

NEW YORK (TheStreet) -- AT&T  (T) dropped slightly during Wednesday's session after ex-dividend trading went live. A cash dividend payment of 46 cents a share, a 2.22% over the previous quarter's payment, is due to be distributed on Feb. 3, 2013. 

By late afternoon, the telecommunications giant had shed 2.3% to $34.13 and high trading volume of 26.2 million shares was nearly 20% higher than its three-month daily average.

In other news, on Tuesday the Dallas-based business acquired 49 high-frequency spectrum licenses from privately-owned Aloha Partners for an undisclosed amount. The purchase covers nearly 50 million people over 14 states including California, Massachusetts and Texas.

The purchase complements AT&T's recent purchases of similar Advanced Wireless Services (AWS) licenses, a move in response to increasing mobile data traffic in metropolitan areas.

The deal, while subject to regulatory approval, is expected to close in the second half of 2014.

TheStreet Ratings team rates AT&T INC as a Buy with a ratings score of B. The team has this to say about their recommendation:

"We rate AT&T INC (T) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • T's revenue growth has slightly outpaced the industry average of 3.6%. Since the same quarter one year prior, revenues slightly increased by 2.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • AT&T INC has improved earnings per share by 14.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, AT&T INC increased its bottom line by earning $1.21 versus $0.66 in the prior year. This year, the market expects an improvement in earnings ($2.48 versus $1.21).
  • The net income growth from the same quarter one year ago has exceeded that of the Diversified Telecommunication Services industry average, but is less than that of the S&P 500. The net income increased by 4.9% when compared to the same quarter one year prior, going from $3,635.00 million to $3,814.00 million.
  • The debt-to-equity ratio is somewhat low, currently at 0.89, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.38 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Diversified Telecommunication Services industry and the overall market on the basis of return on equity, AT&T INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

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