AT&T Inc. (NYSE:T) could post a small 3% increase in earnings per share and 2% increase in revenue when it reports third quarter results tonight. However, analysts suggest that those results could be overshadowed by the company’s potential European acquisitions.

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AT&T said to consider Vodafone acquisition

Reinhardt Krause of Investor’s Business Daily reports that AT&T has been said to be thinking over acquiring Vodafone Group Plc (NASDAQ:VOD) (LON:VOD)—or what’s left of it anyway. The U.S. carrier could make that acquisition early next year after Vodafone sells its 45% stake in Verizon Wireless to Verizon Communications Inc (NYSE:VZ).

Expectations for AT&T

Consensus estimates for AT&T Inc. (NYSE:T) show analysts are expecting earnings per share of 65 cents on $32.18 billion in revenue. In 2010, the carrier’s board of directors authorized it to buy back 300 million shares, a continuation of a plan which started in 2010. Analysts say that if the company had not bought back any shares during the second quarter, its earnings per share would have declined.

AT&T Inc. (NYSE:T) also announced this week that it would sell its rights to 9,700 mobile phone towers to Crown Castle International Corp. (NYSE:CCI). The $4.85 billion received from that sale will help add cash to the company’s balance sheet.

Margins could be a problem for AT&T

Analysts say that margins for AT&T’s wireless business could be pressured because of retail subsidies on mobile phones during the quarter. On Sept. 20, the carrier announced expectations for record sales of smartphones during the third quarter. The company cited “strong customer response” to its new marketing programs and devices.

Apple Inc. (NASDAQ:AAPL)’s two new iPhones came out toward the end of September, undoubtedly providing a boost to AT&T Inc. (NYSE:T)’s mobile phone sales during the quarter. Apple record a record high iPhone launch, which will bolster AT&T’s sales units but potentially pressure its margins. AT&T also increased capital spending to raise broadband speeds by expanding its Project VIP network.