AT&T Inc (NYSE:T) stock is down 5.8% before the bell, despite the telecommunications giant reporting better-than-expected third-quarter results and raising its full-year profit outlook. The company posted adjusted earnings of 65 cents per share on revenue of $32.3 billion, topping analysts' estimates of 60 cents per share and $31.69 billion, respectively. A higher reiterated capex could be weighing.
In addition, the company added 379,000 postpaid phone subscribers during the quarter, falling short of Wall Street's expectations of roughly 387,410. Investors are also still weighing potential competition from SpaceX (SPCX), after its purchase of 800 MHz spectrum raised concerns that Starlink Mobile could become a direct-to-cell competitor.
This could turn out to be one of T's rare negative post-earnings sessions. The stock has finished higher after nine of its last ten reports, including the last three. T closed yesterday at $23.42, heading into today with a 5.7% year-to-date deficit.
Options traders have been more bearish than usual. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and Nasdaq OMX PHLX (PHLX), T's 50-day put/call volume ratio of 1.10 ranks in the 95th percentile of its annual range. An unwinding of this pessimism could provide additional tailwinds for the shares.
Lastly, AT&T sports a Schaeffer's Volatility Scorecard (SVS) of 98 out of 100, indicating the equity has consistently exceeded options traders' volatility expectations during the past year.
