NEW YORK (TheStreet) -- The highlight of AT&T's (T - Get Report) earnings report could be an update on its proposed merger with DirecTV (DTV - Get Report), according to Angelo Zino, an equity analyst at S&P Capital IQ.
"Any type of clarification on when that deal closes here I think would be great for investors," said Zino, who believes the merger will be transformative for the telecom company.
The two companies announced their intention to merge over a year ago, and AT&T has said the deal will result in $2.5-billion in cost synergies. AT&T reports its second-quarter results on Thursday, and Zino is expecting the telecom company has earned 63-cents per share on revenue of $33 billion.
Zino also expects to see fairly healthy growth in wireless subscribers.
T-Mobile recently announced a big increase in its net customer base.
Zino said any decline in the subscriber base at AT&T would be a cause for concern. Zino recommends the stock, especially for investors who favor dividends.
"If you are an investor looking for income, this is a company that's giving away north of a 5% dividend yield," said Zino. "We do continue to see capital appreciation with or without the Direct TV deal."
In a recent report, Zino wrote that he expects to see revenue increasing by the low single digit percentages in both 2015 and 2016.
He also wrote that while the competitive environment has been intense, AT&T has added spectrum and has ample liquidity to growth.
AT&T recently announced plans to expand its business in Mexico. Zino has a 12-month price target of $39 on the stock and currently holds a buy rating.