CHICAGO, Oct. 11, 2011 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: AT&T Inc. (NYSE: T), Apple Inc. (Nasdaq: AAPL), Verizon Communications (NYSE: VZ), Vodafone Plc (Nasdaq: VOD) and Sprint Nextel Corp. (NYSE: S).
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Here are highlights from Monday's Analyst Blog:
AT&T Riding High on iPhone 4S
The second-largest U.S. mobile service provider AT&T Inc. (NYSE: T) saw an astounding demand for the new Apple Inc. (Nasdaq: AAPL) iPhone 4S, despite two other carriers offering the product.
AT&T received more than 200,000 preorders for iPhone 4S within the first 12 hours of booking on Friday. This marks the best order ever received by AT&T for the iPhone.
When the first Apple iPhone 4 was launched, AT&T was the exclusive provider since 2007. However, the company lost its uniqueness to Verizon Wireless, a joint venture between Verizon Communications (NYSE: VZ) and Vodafone Plc (Nasdaq: VOD) this February. Despite the loss, AT&T activated 3.6 million iPhones in the second quarter compared with 3.2 million in the year-ago quarter.
Going by the iPhone track record, we expect AT&T to gain more subscribers from the new 4S, and consequently raking in higher revenues. While iPhones are offering a strong growth momentum, the related high marketing cost is hurting AT&T's earnings. Moreover, the company is currently paying a hefty subsidy of approximately $300 per phone to Apple, which is dilutive to the company's earnings.
Further, the third-largest U.S. wireless carrier Sprint Nextel Corp. (NYSE: S) is also marketing the new iPhone 4S, increasing the competition in the market.
AT&T is offering the iPhone 4S for $199.99, $299.99 and $399.99 for 16 GB, 32 GB and 64 GB, respectively, each with a two-year contract. Verizon has similar pricing plans as AT&T but Sprint is offering an unlimited data plan starting at $69.99 per month plus $10 for additional data. Both Sprint and Verizon did not disclosed their data for the iPhone 4S.
We are maintaining our long-term Neutral recommendation on the stock with the Zacks #3 Rank (Hold).
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