AT&T Inc. (T) announced that its chief financial officer (CFO), Richard G. Lindner will retire on June 1, 2011. The current controller of AT&T, John Stephens will step into Lindner’s shoes.
We believe the transition will hardly hold any adverse impact on the company’s business as both Lindner and Stephens have worked together for over 15 years.
Lindner headed several important departments of the company, including investor and shareowner relations. His association with the company dates back to before AT&T Corporation’s acquisition by SBC Communications Inc., in 2005.
During Lindner’s tenure, the company made several strategic acquisitions (including the purchase of BellSouth in 2007), which helped AT&T become a top U.S. company from a regional telecom carrier.
John Stephens has served AT&T for 19 years and has been the controller since 2001. His responsibilities already include financial reporting and operations, business planning and accounting policy. As a prior vice president taxes for AT&T, Stephens is also experienced in handling all corporate tax matters for the company. Given the responsibility that Stephens already enjoys, we expect this transition to bode well for the company.
The biggest challenge for the carrier now is its loss of iPhone exclusivity to Verizon (VZ), which has so long been the company’s strongest revenue generator. AT&T iPhone business also faces tough competition from Verizon’s Droid smartphones that are based on GoogleInc.’s (GOOG) widely popular Android platform. It remains to be seen how John Stephens navigates the company through these challenges.
We are currently maintaining our long-term Neutral recommendation on AT&T. For the short term (1-3 months), Zacks retains a Sell rating with the Zacks # 4 Rank based on market sentiments over the growing iPhone competition.
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