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AT&T Exec’s $772,000 Sale

AT&T Exec’s $772,000 Sale

Division CEO John T. Stankey sold 30,000 shares of the telecom giant.

WITH THE ANNOUNCEMENT OF the iPad, AT&T (ticker: T) got another gadget to fuel its profitable wireless deal with Apple (AAPL). Stability has reigned for the communications giant’s stock price, but at least one executive has been dialing back his stake, selling $772,209 in AT&T stock.

John T. Stankey, a division chief executive at AT&T, sold 30,000 shares at an average price of $25.74 a share on Feb. 2. After the sale, he held 403,383 shares directly and indirectly and about 174,300 exercisable options. Stankey also holds around 36,400 restricted, nonvoting, stock units. His stake represents far less than 1% of AT&T’s outstanding shares.

The shares Stankey sold are part of a family trust of which he is a trustee.

An AT&T spokesman said the sale was for personal financial-planning purposes.

AT&T shares have fallen 3% over the past six months — not a stellar performance, but better than competitors’: Verizon Communications (VZ) saw an 8% decline over the period, and Sprint Nextel (S) shares dropped 11%.

Based in Dallas, AT&T provides landlines, wireless services and communications technologies world-wide. The company, which has been in business for more than a century, employs nearly 285,000 people. Its 2008 revenue was $124 billion.

AT&T’s old business of providing landlines and voice services has been declining for some time, making its wireless division more instrumental to its performance and growth. In 2007, the wireless business got a boost when Apple selected AT&T as the sole U.S. wireless provider for the iPhone.

On Jan. 27, Apple announced that AT&T would be the wireless provider for its new iPad tablet device. Apple did not announce a change to its exclusive iPhone contract with AT&T, but analysts and technology watchers are expecting Apple to make the smartphone available to Verizon Wireless’ vast network of customers in the near future. Verizon Wireless is a joint venture of Verizon Communications and Vodafone Group (VOD).

On Jan. 28, AT&T announced fourth-quarter adjusted earnings per share that were in line with analyst expectations.

Stankey is president and chief executive officer of AT&T’s operations division. He is responsible for network operations, technology planning, information technology and shared services for wireless and wired networks. Stankey is also responsible for customer service and retention.

Lon Juricic, president of StreetInsider.com, says Stankey’s sale shouldn’t be cause for concern. Stankey last sold in 2007, and while the length of time between that sale and this one is considerable, he hasn’t shown himself to be a great market timer in the past, Juricic says.

“With AT&T, you have to look at whether they can get their network back in shape, hold on to the iPhone and benefit from the iPad,” Juricic says. “And with a 6.6% dividend yield, they’re basically paying you to wait.”

David Burks, an analyst with Hilliard Lyons, rates AT&T at Buy with a $30 price target.

“Our view remains that AT&T is a suitable income vehicle for investors seeking an above-average dividend yield, currently 6.6%,” he wrote in a research note. “We regard the dividend as secure and note the company recently increased its dividend for the 26th consecutive year. While the stock may continue to lag until economic conditions improve, we still believe it offers some upside.”

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