NEW YORK (TheStreet) -- AT&T (T) fell Tuesday after two Democrats in the House of Representatives called for U.S. Congressional hearings into the telecommunications giant's announced merger with DirecTV (DTV).
Representatives Anna Eshoo and Doris Matsui from California told Federal Communications Chairman Tom Wheeler on Tuesday that the scope of the $48.5 billion deal warrants congressional action.
"Both are some of the largest mergers in our nation's telecommunications history," Matsui said today at a House subcommittee hearing about FCC oversight, according to Bloomberg. "Can anyone here today piece together the effects of the Comcast-Time Warner merger and the AT&T-DirecTV merger on consumers and a free and open Internet?" Eshoo said and added "these are massive decisions."
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The stock was down 2.06% to $35.63 at 1:52 p.m.
Separately, TheStreet Ratings team rates AT&T INC as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate AT&T INC (T) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- T's revenue growth has slightly outpaced the industry average of 1.3%. Since the same quarter one year prior, revenues slightly increased by 3.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has slightly increased to $8,799.00 million or 7.31% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -7.97%.
- The debt-to-equity ratio is somewhat low, currently at 0.88, 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 0.42 is very weak and demonstrates a lack of ability to pay short-term obligations.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. 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 underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- The gross profit margin for AT&T INC is rather high; currently it is at 58.98%. Regardless of T's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, T's net profit margin of 11.24% compares favorably to the industry average.
- You can view the full analysis from the report here: T Ratings Report