AT&T Outlook: Mixed and Cloudy

 

AT&T, long a bellwether for the telecom industry, is expected to offer a few hints about the state of the economy when it reports its third-quarter results on Wednesday.

Analysts will be looking for signs that the Dallas-based telco is straining in the economic downturn. Some analysts have already been dialing down expectations in recent weeks, citing competitive and economic pressures. Most anticipate AT&T (nyse: T - news - people ) will report earnings of 71 cents per share, according to Thomson Financial. That's in line with last year's third quarter but 5.3% lower than estimates as recently as 90 days ago (July 20). Revenues are expected to increase about 3.9% to $31.32 billion from $30.13 billion a year ago.

Telcos, with their bread-and-butter offerings of phone and broadband service, were once seen as relatively resilient to slowdowns. But facing increasing competition from wireless and cable-service providers, classic telcos may prove more vulnerable as consumers look for ways to cut their household budgets, dropping little-used landlines and eschewing pricy, high-speed Internet services.