(Updated from 2:13 p.m. EDT)

AT&T

(T) - Get AT&T Inc. Report

will be ringing in its results later this afternoon, and analysts will be cocking their ears for what Ma Bell has to say about its broadband division.

AT&T rejected

Comcast's

(CMCSK)

$40 billion bid for

AT&T Broadband

last week. The company is in the middle of a massive plan to reorganize its broadband, business, consumer and wireless division into separate companies. Several observers are expecting the company to miss expectations, given the soft conditions of the telecom sector. Still, with the sale of the broadband unit unresolved, experts said they would be focusing less on AT&T's overall earnings and more on AT&T Broadband's results. A strong quarter from the division could be a mighty bargaining chip.

"People are looking at this company on a break-up basis now, so I think they're going to be zeroing on the broadband margins," said Patrick Comack, an analyst at Guzman, who believes Comcast's unsolicited bid for AT&T Broadband was below fair market value. Comcast, which is based in Philadelphia, made the offer earlier this month in an attempt to create the world's largest broadband communications provider. The bid included about $40 billion in stock and the assumption of $13.5 billion in debt. But after AT&T rejected the bid, Comcast said it wasn't likely to raise the offer.

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Comack said AT&T has "cut a lot of fat" from the broadband unit, including raising prices, cutting jobs and selling properties. "I think the AT&T board saw the numbers before they made their decision," the analyst said. "They wouldn't have made the rejection so quickly if the numbers aren't better." Comack also said he expects AT&T to earn 5 cents a share for the second quarter. (Comack's firm has had an underwriting relationship with

AT&T Wireless

(AWE)

).

According to earnings tracker

Thomson Financial/First Call

, analysts expect AT&T to earn 3 cents a share in the second quarter, compared with 53 cents a share in the year-ago period. AT&T reaffirmed the full-year projections for its four segments when the company reported first-quarter earnings on April 24, but guided down second-quarter results to 4 cents a share.

"We're basically looking for a flat quarter, though one nickel here or there doesn't sway our opinion. We're not a big follower of earnings," said Barry Arnold, chief investment officer at Arnold Investment Counsel. Arnold described AT&T's latest quarter as "convoluted" because of the company's spinoff of its wireless unit. The wireless telephone services unit, AT&T Wireless, split from its parent on July 9.

Comack agreed. "I really don't think earnings-per-share is something to really look at," he said. "The stock will pop only if

AT&T's broadband margins are better than first-quarter margins, and if the company can talk about how business service operations have stabilized."

Shares of AT&T recently fell 58 cents, or 2.8%, to $20.32 ahead of the earnings release, which is scheduled to come after the close of regular trading today.