Apple's iPad Boosts AT&T

AT&T's new iPad partnership sent shares rising, but the loss of its iPhone deal might weigh on its fourth-quarter results.
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DALLAS (

TheStreet

) --

AT&T

(T) - Get Report

may have landed a lifeline on Wednesday when

Apple

(AAPL) - Get Report

unveiled that its newly launched iPad would be available on the telco's 3G network starting in the spring.

Before the

splashy Apple event

was held early in the day, things were looking a bit more grim for AT&T, which reports its fourth quarter results before market open on Thursday.

Ma Bell's exclusive deal to carry Apple's iPhone ends this year, and the telco giant has also had to contend with a marketing blitz from rival

Verizon

(VZ) - Get Report

, in which a barrage of TV ads criticize AT&T's coverage.

AT&T's wireless subscriber growth is said to have

slowed considerably

, and analysts are anticipating that the company will report some lower-than-expected numbers.

"We expect AT&T to report 1 million post-pay adds -- slightly below our initial estimate of 1.1 million as momentum for the Q3 launch of the iPhone 3Gs wanes and Verizon's 'map' ad campaign impact results," wrote Jennifer Fritzsche, senior analyst at Wachovia, in a recent note.

The analyst nonetheless predicts that AT&T will add a total of 2.25 million new wireless subscribers, driven by reseller net adds of 1.3 million, specifically strong

e-reader

demand.

Analysts surveyed by Thomson Reuters expect AT&T to report revenue of $30.86 billion, down slightly from $31.1 billion in the prior year's quarter. Excluding items, the company is expected to earn 51 cents a share, compared to 64 cents a share in the prior year's quarter.

Earlier this week rival Verizon put up

mediocre

fourth-quarter numbers of its own but added 2.2 million wireless subscribers during the quarter. With 1.23 million of those users direct retail customers, Verizon is clearly seeing strong demand for its

Motorola

(MOT)

Droid phones and Blackberries from

Research In Motion

(RIMM)

.

AT&T, though, has been

bolstering

its own smartphone story, recently announcing plans to sell

Google

(GOOG) - Get Report

Android phones from Motorola,

Dell

(DELL) - Get Report

and

HTC

during the first half of 2010.

The Texan firm still finds itself in an increasingly cut-throat environment, however, and has already had to shift its pricing model following a similar move by Verizon.

"AT&T quickly followed Verizon's decision to lower high-end unlimited prices and refine mid-tier pricing higher," wrote David Barden, an analyst at Bank of America Merrill Lynch, in a note released on Wednesday. "We are looking for commentary

during the fourth-quarter conference call on projected impact and industry response as well as the iPhone exclusivity agreement."

AT&T's stock has nonetheless earned admiring glances in recent months on account of its

yield

and the company's

strong cash flow

.

The company's shares rose 29 cents, or 1.14%, to close at $25.62, up from its opening price of $25.21.

-- Reported by James Rogers in New York

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