T - expects profits to grow at a double-digit percentage rate each year over the next three years

AT&T, Inc. (T), the name adopted by SBC Communications Inc. after it acquired the company in mid-November, expects profits to grow at a double-digit percentage rate each year over the next three years. Analysts' earnings estimates have been trending higher for the next two quarters and the next two years. The Zacks #1 Rank stock has a price-to-book ratio of 2.2. Full Analysis AT&T, Inc. is a large telecommunication holding company in the United States. The company provides phone and data services, such as Web hosting and data transport, to consumers and businesses, notably large corporations. AT&T also owns a directory-publishing business. AT&T has topped analysts' earnings expectations for the past four quarters. The company has also met or topped the consensus estimate in nine consecutive quarters. AT&T most recently beat the Street by 9.1% with fourth-quarter 2005 profits of 48 cents per share. The company's fourth-quarter 2004 earnings per share were 34 cents. The new AT&T Inc., which was purchased on November 18th of last year by SBC Communications Inc., reported its first quarterly report in late January. SBC adopted the AT&T name. Fourth-quarter and full-year results are for SBC only until that date and for the combined company in the last six weeks of 2005. For the quarter ended Dec 31, 2005, AT&T said its profits amounted to $1.7 billion. The company cited that it is experiencing growth in its wireless, broadband and business services. Total revenue during the quarter was $13.0 billion. For the full-year 2005, the combined SBC-AT&T posted profits and revenues of $4.8 billion and $43.9 billion, respectively. On Jan 31, 2006, AT&T announced that its earnings per share are expected to grow at a double-digit percentage pace in each of the next three years. The company cited merger-related efficiencies and growth in its wireless, DSL and business services as the driving forces behind future profit growth. Analysts are very optimistic about the combined company going forward. The current consensus earnings estimate for the first and second quarters of 2006 have been upped by 16.7% and 15.9%, respectively, over the past 90 days. The consensus earnings estimate for the full-year 2006 currently stands at $1.92, which has increased 11.6%. Forecasts for full-year 2007 profits have risen 24.9% over the past three months. Edward Whitacre Jr., AT&T chairman and chief executive, stated that the assets they obtained are in great shape, a thorough job of merger planning was conducted, key talent has been retained and customer response to the combined company has been very positive. The company's price-to-book (P/B) multiple is 2.2. ROE currently stands at 14%, compared to the industry average of 10%. The stock trades at a valuation of 15.8x trailing 12-month earnings and at 14.1x its current fiscal year estimated earnings. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. The ranks are updated every Monday morning on Zacks.com. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. Content Courtesy: Zacks Investment Research #1 Ranked Stocks Highlight Archive To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions.

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ALA - has moved above its 200-day and 50-day moving averages and those averages themselves are trending higher

Alcatel Sponsore (ALA), a Zacks #1 Rank stock, is emerging from a long sideways-trading range. Full Analysis Alcatel builds next-generation networks, delivering integrated end-to-end voice and data communications solutions to established and new carriers, as well as enterprises and consumers worldwide. The company, the world leader in ADSL1 equipment, has expanded its ADSL modem line with the launch of the Speed TouchTM IADy, offering Voice over ADSL service. Working on an existing copper telephone line, ADSL's transmission speed is up to 200 times faster than today's analog modems. It's often said that most stocks spend up to 80% of their time in sideways, non-trending action. For ALA the good news is that it has spent nearly the last year in a sideways congestion area. The bad news is that the strong trend was down for more than 18 months previously. Finally, there's some evidence to believe that ALA is beginning to awaken from its long slumber. Indeed, things have quietly been improving for ALA for almost a year now. In the three quarters prior, ALA delivered positive earnings surprises. In the December 2005 quarter, reported on Feb 2, ALA matched analyst estimates, reporting EPS of 27 cents for the quarter versus 11 cents per share during the same quarter last year. That amounted to a 145.5% gain. Sales were strong (42.4% higher than a year ago) as was income, reported at $373.7 million versus $162.7 million in the quarter a year ago, a gain of 129.7%. One of the basic rules of Momentum investing is to buy good stocks at the same time that the market is recognizing and rewarding the company's improvements. A Zacks #1 Rank stock, ALA is clearly improving internally. This week, the stock reached its highest price in over a year on heavy trading volume. ALA has moved above its 200-day and 50-day moving averages and those averages themselves are trending higher, indicating that the underlying trend for ALA remains up. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. The ranks are updated every Monday morning on Zacks.com. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. Content Courtesy: Zacks Investment Research #1 Ranked Stocks Highlight Archive To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions.

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SMDI has met or exceeded estimates - estimates for 2006 have increased 13%

Sirenza Microdevices, Inc. (SMDI) has met or exceeded estimates in eight out of the past nine quarters. Five different analysts raised their estimates for 2006 since Jan 23. Over the past 30 days, estimates for 2006 have increased 13% to 26 cents per share. Full Analysis Sirenza Microdevices, Inc. (SMDI) designs high performance radio frequency (RF) components for the communications and aerospace/defense markets. The company was formed in 1985 and was originally known as Matrix Microassembly and later Stanford Microdevices. Following the acquisition of Vari-L Company, Inc. in May 2003, the corporate headquarters was moved from Sunnyvale, California to Broomfield, Colorado. Sirenza’s key products include amplifiers, power amplifiers, discrete devices, RF signal processing components, signal source products, military/aerospace components, fiber optic components, and high performance multi-component modules (or MCMs) for various high-frequency transmit and receive applications. Sirenza should continue to benefit from an improved wireless infrastructure capital spending environment. Capital spending on wireless infrastructure was up more than 10% (on a global basis) in 2004, as the domestic wireless operators continued to emphasize service quality to limit churn (customer switching) and third-generation (3G) wireless deployments gained momentum in Europe and elsewhere. The company has a solid customer base, with longstanding relationships with many of the key telecom equipment original equipment manufacturers (OEMs), including Andrew Corporation, Ericsson, and Lucent Technologies Inc. (as well as their contract manufacturers). Demand for wireless infrastructure gear and related components has picked up in 2005 (following a soft patch in late 2004). As OEMs start to place orders and factory utilization improves, the company has a good opportunity to achieve its 49% - 51% gross margin target in the current fiscal year. On Jan 25, SMDI reported better-than-expected results for the fourth quarter (ended December 2005 ). Revenues of $19.5 million were up 30% from a year ago (up 13% from the September quarter) and slightly above management’s guidance range of $17.5 million - $19.0 million. Adjusted earnings of eight cents per share, versus four cents in the year-ago period, came in at the upper end of management’s forecast range between six cents and eight cents and also beat the Zacks consensus by a penny. The company has met or exceeded estimates in eight out of the past nine quarters. Five different analysts raised their estimates for 2006 since Jan 23. Over the past 30 days, estimates for 2006 have increased 13% to 26 cents per share. The stock is trading at 25x 2007 estimates of 30 cents per share, slightly above the long-term growth rate of 20%, giving the stock a PEG ratio of 1.25. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. The ranks are updated every Monday morning on Zacks.com. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. Content Courtesy: Zacks Investment Research #1 Ranked Stocks Highlight Archive To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions.

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