Telecom Stock Q4 Earnings on Feb 23: COMM, ACIA & Others
We have reached almost the end of the Q4 2016 earnings season. As per the latest Earnings Preview, 411 S&P 500 members (accounting for 82.2% of the index’s total membership) have reported their fourth-quarter earnings results as of Friday, Feb 17. Total earnings for these 411 index members are up 8% on 4.9% higher revenues, with 68.9% beating EPS estimates and 54.7% coming ahead of top-line expectations. Results from only about 18% of the S&P 500 members are still awaited.
Our latest Earnings Preview states that the Q4 earnings season has surprisingly turned out to be a good one. Not only is growth on track to be the highest in two years, total earnings for the quarter are also about to set a new record. Importantly, this growth isn’t a result of easy comparisons, but is actually a function of strong gains in actual earnings. In fact, the overall tally of Q4 earnings for the S&P 500 index is on track to reach an all-time record, surpassing the previous record achieved in the fourth quarter of 2014.
In this reporting cycle, we anticipate the pace of growth to improve steadily. In fact, our latest data projects that earnings for the S&P 500 companies are now on track to grow 7.4% from the year-ago period on 3.9% higher revenues. This compares favorably with earnings growth of 3.7% in the previous quarter, on 2.2% higher revenues.
‘Computer and Technology’ Sector at a Glance
The ‘Computer and Technology’ Industry is one of the broader sectors of the 16 Zacks sectors that are expected to see earnings growth in the fourth quarter. Our latest article states that for the Technology sector, we already have Q4 results from 94.1% of its total market cap. Total earnings for these companies are up 8.7% from the same period last year on 6% higher revenues, with 74.1% beating EPS estimates and 74.1% beating revenue estimates.
This is better earnings growth than what we saw from this same group of Tech companies in Q3 or the preceding four quarters, but is almost in line with the 12-quarter average. Revenue growth, on the other hand, is tracking above historical periods. The outperformance is in terms of positive surprises as well, with the proportion of Tech sector positive surprises notably tracking above Q3, the 4-quarter and 12-quarter averages.
We further predict that earnings of the ‘Computer and Technology’ space are on track to be up 9.0% on 4.4% higher revenues than last year.
Telecom Stocks to Release Q4 Earnings on Feb 23
Let’s see what’s in store for these five telecommunication companies that are expected to report their fourth-quarter numbers on Feb 23, 2017.
CommScope Holding Company, Inc. COMM is a premier network infrastructure provider, headquartered in Hickory, NC. The company provides end-to-end solutions connecting technology and wireless and wired networks. It operates in three segments: Wireless, Enterprise and Broadband.
Last quarter, CommScope Holding posted a positive earnings surprise of 14.49%. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in three of the previous four quarters, with an average beat of 10.65%.
However, the company has an Earnings ESP of 0.00% (both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 54 cents) and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
CommScope Holding Company, Inc. Price and EPS Surprise
CommScope Holding Company, Inc. Price and EPS Surprise | CommScope Holding Company, Inc. Quote
Our proven model does not conclusively show that CommScope Holding 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. You can see the complete list of today’s Zacks #1 Rank stocks here.
Acacia Communications, Inc. ACIA designs, develops, manufactures and markets communication equipment. The company headquartered in Maynard, MA, offers coherent optical interconnect products for cloud infrastructure operators and content and communication service providers. It operates primarily in the Americas, Europe, the Middle East, Africa and the Asia Pacific region.
The company has a Zacks Rank #3 which according to our model increases the odds of an earnings surprise. However, the company’s Earnings ESP of 0.00% (Most Accurate estimate and Zacks Consensus Estimate stand at 74 cents) dims the possibility. The company’s earnings surpassed the Zacks Consensus Estimate in two of the previous four quarters, with an average beat of 126.82%.
Acacia Communications, Inc. Price and EPS Surprise
Acacia Communications, Inc. Price and EPS Surprise | Acacia Communications, Inc. Quote
Hence, as per our quantitative model, we cannot conclusively predict an earnings beat for the company.
InterDigital, Inc. IDCC is a company, headquarted in Wilmington, DE. The company develops and markets advanced digital wireless telecommunications systems using proprietary technologies for voice and data communications and have developed an extensive patent portfolio related to those technologies.
Last quarter, the company posted a negative earnings surprise of 0.66%. However, the company’s earnings surpassed the Zacks Consensus Estimate in three of the previous four quarters, with an average beat of 29.99%. The company’s Zacks Rank #3 increases the predictive power ofESP. However, the company’s 0.00% ESP (Most Accurate estimate and Zacks Consensus Estimate stand at $3.76) makes surprise prediction difficult.
InterDigital, Inc. Price and EPS Surprise
InterDigital, Inc. Price and EPS Surprise | InterDigital, Inc. Quote
Cogent Communications Holdings, Inc. CCOI is a multinational Internet service provider, headquarted in Washington, D.C. Cogent's primary services consist of Internet access and data transport, offered on fiber optic, IP data-only network, along with colocation in data centers.
The company posted a negative earnings surprise of 20.00% last quarter. Moreover, the company’s earnings lagged the Zacks Consensus Estimate in two of the previous four quarters, with an average miss of 7.68%.
Further, weakening the chance of earnings beat is the company’s current ESP of -8.33%. This is because the Most Accurate estimate stands at 11 cents while the Zacks Consensus Estimate is pegged at 13 cents.
Cogent Communications Holdings, Inc. Price and EPS Surprise
Cogent Communications Holdings, Inc. Price and EPS Surprise | Cogent Communications Holdings, Inc. Quote
Hence, as per our quantitative model, inspite of carrying a favorable Zacks Rank #3, we cannot conclusively predict earnings beat for the company.
BroadSoft, Inc. BSFT is a global communication software and service provider with over 500 customers worldwide supporting millions of subscribers. The company is headquarted in Gaithersburg, MD.The company is basically is engaged in providing software that enables fixed-line, mobile and cable service providers to deliver voice and multimedia services over their Internet protocol-based, or IP-based, networks.
The company posted a positive earnings surprise of 400.00% last quarter. Moreover, the company’s earnings outshined the Zacks Consensus Estimate in all the previous four quarters, with an average beat of 242.36%. Moreover, the company’s current Zacks Rank #3 increases the predictive power of ESP. However, the company’s 0.00% ESP (Most Accurate estimate and Zacks Consensus Estimate stand at 39 cents) makes surprise prediction difficult. To this end, we have to say that we cannot conclusively predict an earnings beat for the company.
BroadSoft, Inc. Price and EPS Surprise
BroadSoft, Inc. Price and EPS Surprise | BroadSoft, Inc. Quote
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