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By Jason Stipp | 01-13-2011 05:01 PM

Five Firms Leaving the Past Behind

Morningstar markets editor Jeremy Glaser considers the future for AT&T, Sears, for-profit educators, ITT, and automakers.

Jason Stipp: I'm Jason Stipp from Morningstar and welcome to the Friday Five. New Year is often the time for making a change, making a move, or leaving the past behind. Joining me today with five things that are leaving is Morningstar Market's Editor, Jeremy Glaser.

Jeremy, thanks for joining me.

Jeremy Glaser: Jason, always my pleasure.

Stipp: What do you have for the Friday Five this week?

Glaser: Well, this week we'll see some changes at AT&T, at for-profit education companies, at industrial conglomerate ITT, at the Auto Show, and finally Sears Holdings.

Stipp: So Jeremy, iPhone users got some news this week that they might have a choice for carrier in the near future.

Glaser: Absolutely. Verizon Wireless has got to be carrying the iPhone starting in early February and AT&T probably isn't very happy that it's leaving the exclusive stable of their network, but it's not going to be devastating for them.

Our analyst Mike Hodel pointed out that AT&T has a ton of customers that aren't necessarily using the iPhone right now. People locked into contracts aren't necessarily going to pay a hefty termination fee, and then re-buy their phone just to go to the Verizon network. There's a lot of new devices like those from Android and things like Windows Phone 7 that may entice people to stay on the network. They could still get the iPhone in AT&T; it's not going anywhere.

I think, they're going to focus on increasing their stability. They're rolling out their 4G network a little bit faster than people had initially expected. I think in the end of the day, AT&T and Verizon are still going to be the major wireless companies. It's not going to have a huge impact on their market shares.

Stipp: I'm personally hoping to sit tight with AT&T and hope that all the defectors free up some network space for my iPhone, but we'll see how that plays out. In the for-profit education industry, they are probably hoping to leave a pretty rocky 2010 behind. What does the future look like for them?

Glaser: That's absolutely true. There was a lot of regulatory uncertainty for the for-profit education space in 2010. There were a lot of concerns they wouldn't be able to have access to federal grants for student loans anymore and that those students would have to find some kind of private financing which is extremely difficult for these kind of degrees.

Apollo Group, which runs University of Phoenix, they have reported their results this week, and it show that things are really not going that badly for them. They are able to raise tuition rates, which is something that they have been doing consistently, but they are able to do that again. They think that the outlook is maybe not quite as bad as they initial thought, and their stock popped quite nicely on these better than expected results. I think that could be sign that we're at a new normal, that this uncertainty is going to be out there, it's never going to completely go away more likely than not, but that these companies are getting on with business, students are still willing to go there. And it could show that they are finally turning the page on all the stuff that happened in 2010.

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