Verizon (VZ) is scheduled to report quarterly results before the market opens on October 25, while AT&T (T) is scheduled to report before the market opens on October 28. What to watch for: 1. VERIZON’S OUTLOOK: When Verizon reported its second quarter results on August 1, affirmed its FY19 adjusted earnings per share guidance of low single-digit percentage growth, low single-digit percentage growth in full-year consolidated revenues, and capital spending in the range of $17B-$18B, including the expanded commercial launch of 5G. 2. AT&T’S OUTLOOK: When AT&T reported its second quarter results on July 24, the company affirmed low single-digit adjusted EPS growth in FY19, end-of-year net debt to adjusted EBITDA guidance in the 2.5x range, gross capital investment guidance in the $23B range, and a dividend payout ratio in the 50% range. 3. ELLIOT RECOMMENDS “VALUE-CREATION OPPORTUNITY” FOR AT&T: On September 9, Elliott Management, which manages funds that collectively beneficially own $3.2B of AT&T Inc., released a letter outlining a “compelling value-creation opportunity at AT&T.” The letter, addressed to the board, noted that the opportunity could lead AT&T to a $60+ per share value by the end of 2021, representing a 65%+ upside to today’s share price. According to the letter, Elliott made the investment in AT&T – among its largest ever – because it exhibits a unique combination of historical underperformance, a depressed valuation, well-positioned assets and a clear path forward to generate extraordinary value for shareholders and other stakeholders. “Over the past decade, AT&T’s shareholder returns have underperformed the S&P 500 by well over 100 percentage points. This share-price underperformance has occurred as AT&T’s M&A strategy has taken it into multiple new markets over a series of deals totaling nearly $200B, and as its operational performance has measurably declined. As a result, AT&T today is deeply undervalued, trading at just over half the multiple of the S&P 500 – by far its biggest discount yet.” Despite these setbacks, Elliott believes that AT&T possesses a world-class collection of assets, each with a leading market position, priced today at historically discounted levels. The letter notes that this irreproducible collection of leading businesses includes a well-performing wireless business poised for future growth and market leadership in 5G, the premier global enterprise connectivity solution, and one of the world’s most successful media franchises. Elliott’s letter outlines a four-part plan – the Activating AT&T Plan – that would improve AT&T’s share price and its business. The Plan recommends increased strategic focus, improved operational efficiency, a formal capital allocation framework, and enhanced leadership and oversight. The letter states that the Plan could enable AT&T to achieve a value per share of $60+ by the end of 2021, prior to any strategic actions regarding the portfolio. Beyond delivering a higher stock price for its shareholders, both institutional and employee, the letter states that a more focused and efficient AT&T would deliver far-reaching benefits to other stakeholder groups as well. 4. NET NEUTRALITY: On October 1, Bloomberg reported that a three-judge panel of the U.S. appeals court upheld Federal Communications Commission rules that let broadband providers slow or block third-party web content, permitting the FCC’s 2017 determination to reverse “net neutrality” regulations championed by Democrats, reported Bloomberg. Broadband providers include AT&T, Charter Communications (CHTR), Comcast (CMCSA, CMCSK) and Verizon. Content providers such as Netflix (NFLX), Google (GOOG, GOOGL), Amazon (AMZN), Facebook (FB) and Twitter (TWTR), have all lobbied in favor of net neutrality.