Cincinnati Bell (CBB) Q4 Earnings: Disappointment in Store?
Cincinnati Bell Inc. CBB is slated to release fourth-quarter 2015 results on Feb 18, before the opening bell.
Last quarter, Cincinnati Bell recorded a 50.00% positive earnings surprise. Moreover, the trailing four-quarter average earnings surprise stands at 66.67%. Let’s see how things are shaping up for this announcement.
Past-Quarter Flashback
Continuous erosion in local access lines, heavy capital expenditure requirements, slower pace of ARPU growth along with legal hurdles are some of the factors that may weigh upon the quarter’s performance. Moreover, intensifying competition in the company’s operational region can be a drag on its pricing power, thereby inducing pressure on its margins.
Notably, for full-year 2015, the company expects revenues and adjusted EBITDA of approximately $1.1 billion and $297 million (plus or minus 2%), respectively.
Meanwhile, Cincinnati Bell’s Entertainment and Communications segment stands as the prime growth driver along with strength in the Fioptics business from continuous fiber deployment. Moreover, investment in strategic products, high-speed Internet offerings and strong managed service demand should aid the company in delivering a stable financial performance in the to-be-reported quarter. Also, high-speed Internet service deployment in rural areas, by making use of government funding, may strengthen its financial position further.
Earnings Whispers
Our proven model does not conclusively show that Cincinnati Bell is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: Cincinnati Bell has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are poised at 2 cents.
Zacks Rank: Cincinnati Bell has a Zacks Rank #4 (Sell). Note that, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter:
Frontier Communications Corporation FTR has an earnings ESP of +50.00% and a Zacks Rank #2.
Cogent Communications Holdings, Inc. CCOI has an earnings ESP of +33.33% and a Zacks Rank #3.
Windstream Holdings, Inc. WIN has an earnings ESP of +16.33% and a Zacks Rank #3.
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CINCINNATI BELL (CBB): Free Stock Analysis Report
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