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AT&T dials up an earnings surprise

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After setting new 52-week lows week after week, shares of Dow component AT&T (NYSE:T) $13.81 are jumping 14.5% to $15.90 after the telecom services giant reported Q1 earnings of $0.67 per share, which was 15-cents better than Wall Street's estimates. While T's bottom line firmed revenues fell 5.9% year-over-year to $8.99 billion, which was slightly above consensus of $8.87 billion. In a move to drive earnings to the bottom line, AT&T said it would cut its cap ex spending for 2003 to approximately $3.0 billion from prior view of $3.3-$3.5 billion.

The Wall Street Journal's "Heard on the Street" column highlight's AT&T's valuation, which points to T trading at 7.8 times forward 2003 estimates. However, one fund manager doesn't believe there is an sense of urgency to get into the stock as the worst may be yet to come for the telecom sector. The article also discusses the potential for T to be an acquisition target of BellSouth (NYSE:BLS) $21.71 or SBC Communications (NYSE:SBC) $19.98.

BellSouth (NYSE:BLS) $21.71 reported quarterly earnings this morning. Excluding non-recurring items, the company reported EPS of $0.51 per share, which beat the Street's estimates by 6 cents.

Shares of Boeing (NYSE:BA) $27.80 are gaining 20-cents a share over the New York ECNs after the company reported Q1 earnings of $0.42, which was 18-cents better than consensus. Revenues fell 11.3% year-over-year to $12.26 billion, but were still better than consensus estimates of $11.8 billion. Actual earnings along with consensus estimates both excluded $1.02 restructuring charge. For 2003, Boeing said it sees full year EPS of $1.70- $1.90, which has consensus of $1.77 right in the middle of the range.

Morning movers on the NASDAQ are eBay (NASDAQ:EBAY) $89.22 which jumps to $93.35 in pre-market trade after reporting earnings last night.

PeopleSoft (NASDAQ:PSFT) $16.04 falls to $15.25 over Instinet after reporting Q1 EPS of $0.12, which beat recently lowered estimates by a penny. On April 3, PSFT had warned that a weaker economy and delays in capital spending would hurt quarterly results.

Stock futures hint of a modestly higher open as S&P futures (sp03m) tick higher by 1.5 points at 911.00. NASDAQ futures (nd03m) are gaining 4.5 points at 1,108.50, while Dow futures (dj03m) are rising 19 points at 8,480.

Fair value for the S&P 500 today is $-0.64. That price will not change during the session. HL Camp & Company has their computers set for program buying at $0.64 and set for program selling at $-1.62. Fair value for the NASDAQ-100 today is $2.39.

Treasuries are relatively unchanged in this morning's early trade with fractional buying in the shorter-dated 5-year, being offset with fractional selling in the longer-dated 30-year, with the middle of the curve showing the 10-year Treasury unchanged, with the benchmark bond's YIELD ($TNX.X) unchanged at 3.983%.

The U.S. Dollar Index (dx00y) 98.99 +0.28% is gaining 0.28, while June Gold futures (gc03m) $334.10 -0.2% slip $0.70 in early trade.

Jeff Bailey

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