Now that we're in the middle of yet another fairly bullish earnings season, I wanted to take a closer look at the upcoming earnings for one particular company in the telecom sector and share my thoughts on what needs to happen in order for AT&T (NYSE: T) to meet and/or surpass analysts' expectations.

Company Overview

Headquartered in Dallas, Texas, AT&T provides telecommunications services to consumers and businesses in both the United States and throughout the world. Its wireless segment, which had 116 million global subscribers as of Q1 2014, offers various wireless voice, data, text, and other services, including local wireless communications services, long-distance services, and roaming services. Its wire-line segment provides data services, such as switched and dedicated transport, DSL Internet access, network integration, managed Web-hosting, packet, and enterprise networking services, as well as local, interstate, and international wholesale networking capacity to other service providers.

Recent Trend Behavior

On Monday, shares of T, which currently possess a market cap of $186.63 billion, a forward P/E ratio of 13.09, and a dividend yield of 5.12% ($1.84), settled at a price of $35.96/share. Based on a closing price of $35.96/share, shares of T are trading 1.47% above their 20-day simple moving average, 2.12% above their 50-day simple moving average, and 6.52% above their 200-day simple moving average. These numbers indicate a short-term and mid-to-long term uptrend for the stock, which generally translates into a buying mode for most near-term traders and many long-term investors. If the company can demonstrate a stronger-than-expected earnings performance when it announces Q2 results on July 23, there's a very good chance the company's trend behavior will continue to move in a very positive upward direction.

Upcoming Earnings Outlook

When it comes to the company's upcoming Q2 earnings, there are a number of things potential investors should consider. For instance, analysts are currently calling for T to earn $0.64/share in terms of EPS (which is $0.05/share lower than what the company had reported during Q1 2014, and $0.03/share lower than what the company had reported during the year-ago period) and $33.26 billion in terms of revenue when its latest earnings are released on July 23.

In order to meet and/or exceed its quarterly EPS estimates, I'd like to see a 10%-to-12% increase in the company's Q2 postpaid net adds (as compared to Q1's postpaid net adds of 625,000), a 3%-to-5% increase in total wireless subscribers (as compared to Q1's total wireless subscribers of 116 million), a 1%-to-2% increase in wire-line segment revenues, a 3%-to-5% increase in total U-verse revenues, a 1%-to-1.5% increase in broadband connections (versus a flat performance during Q1), and lastly, a 2.5%-to-4% increase in the company's revenues (as compared to Q1's revenues of $32.47 billion).

Several Growth Drivers To Consider Heading Into Q2 Earnings

Although AT&T recently noted that no real wireless growth is expected to occur during the second quarter, there were two key positive takeaways from the company's updated guidance that was reported back in early June.

• The first of the two takeaways is the fact that Q2 wireless postpaid net adds are expected to top 800,000 versus the 625,000 that were demonstrated in Q1 and its Postpaid churn is expected to be at 0.95% or lower versus its year-ago churn of 1.02%.

• The second of the two takeaways is the fact that the company's Next-related smartphone sales are expected to rise to 3.2 million from Q1's 2.9 million, and make up roughly 50% of total sales. Investors should note that approximately half of all postpaid smartphone subscribers are now on subsidy-free Mobile Share Value plans, and an estimated 67% of all postpaid smartphone subscribers are expected to be on one by year's end.

Conclusion

For those of you who may be considering a long-term position in AT&T, I'd actually look to keep a closer eye on the company's wireless prepaid net adds over the next 6-12 months since any sustainable uptrend in this particular segment could positively impact the company's growth well into the second-half of 2015.

In terms of the company's upcoming quarter, steady increases of at least 10% in terms of the company's Q2 postpaid net adds as well as a steady increase of at least 2% in terms of its revenues could help AT&T stay on course to meet or even surpass analysts' expectations when it announces earnings on July 23.