AT&T company overview and history

Financial Health of AT&T

With American Telephone and Telegraph Company (AT&T) becoming incorporated in 1885, this New York-based subsidiary of the American Bell Telephone Company embarked upon a mission to provide networking as its core service (2011). Shortly after the invention of the phone, AT&T built its network from New York to various eastern seaboard cities, with its major milestone in Chicago, which marked the longest line possible with existing technology. In 1899, AT&T acquired the assets of its parent company, and it soon became known as the Bell Telephone System that primarily served long distance lines and telegraph service. It remained as a monopoly until the 1984 when an agreement was reached with the U.S. Dept of justice to dismantle the system into eight companies (AT&T, 2011). Maintaining a competitive advantage in a dynamic environment become fierce and required continuous innovation, improvement and expansion in the telecommunications industry. In spite of this changing landscape, AT&T attempts restructuring through an acquisition to capture increase profitability.

Growth Plan

As an integrated telecommunications services and equipment company, AT&T managed sustainability in a newly competitive environment. In today's climate, AT&T strives to be a global networking leader, focused on delivering services to the residential, small businesses, and government customers. Such an expansion of services has affected it profitability in the long-term. However, it desires to increase its market share in the wireless industry to compete with Verizon. Currently, its stock is traded on the New York Stock Exchange (NYSE) with "T" as its ticker symbol. As on November 25, 2011, its stock traded at $27.41. Although past performance should not be solely relied upon to predict future performance, it sure is a reasonable indicator. Additionally, talks of mergers and acquisitions create uncertainty in the market, thus affecting investor's confidence. Hence, such talks are looming as AT&T and Deutsche Telekom attempt to join forces in the wireless industry to create a formidable force.

Profitability

Although AT&T's profitability remains flat, it is stable. On March 20, 2011, AT&T Mobility announced its plan to acquire T-Mobile USA from Deutsche Telekom for $39 billion. If regulator bodies approve venture, AT&T will have more than 130 million subscribers (AOL, 2011). Since the announcement, its stock price rose significantly in April to August, reaching over $31.50. However, the Justice Department filed an antitrust lawsuit to block the acquisition on August 31, 2011 because the deal would significantly reduce competition (Flores, 2011). Since this announcement, the stock price dipped considerably to approximately $28, which is a reflection of the pessimistic attitude of this deal even materializing. Subsequently, AT&T and Deutsche have withdrawn their request for FCC approval of the merger because both feel it is prudent to deal with the lawsuit.