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Frontier Communications (FTR): Earnings Preview for Q2
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Frontier Communications Corporation , a leading regional telecommunication company in the U.S., is scheduled to report second-quarter 2016 financial numbers on Aug 1, after market close.
Last quarter, the company posted an impressive 111.11% positive earnings surprise. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in all of the past four quarters, with an average beat of 206.95%. Let’s see how things are shaping up for this announcement.
Our proven model shows that Frontier Communications is likely to beat estimates because it has the right combination of two key elements.
Zacks ESP: Frontier Communications has an Earnings ESP of +25.00%. This is because the Most Accurate estimate stands at a loss of 3 cents while the Zacks Consensus Estimate is pegged at a loss of 4 cents. This is a meaningful and leading indicator of a likely positive earnings surprise.
Zacks Rank: Frontier Communications has a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) have a significantly higher chance of beating estimates. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of Frontier Communications’ Zacks Rank #2 and +25.00% ESP makes us confident of an earnings beat at the company.
What is Driving the Better-than-Expected Earnings?
The purchase of Verizon Communication Inc.’s (VZ - Free Report) wireline assets for $10.5 billion in California, Florida and Texas helped Frontier Communications maintain growth and dividends. We are also optimistic about Frontier Communications’ collaborations with other companies to offer differentiated products. In this regard, the launch of OTT (over the top) services like ‘Freedom TV’ and its premium digital platform to deliver HD TV ultra-fast broadband and enhanced Voice over Internet Protocol (VoIP) services– Vantage – should result in increased market traction.
Meanwhile, management foresees strong broadband subscriber growth in 2016 and expects growth to accelerate on the back of new marketing programs. Frontier Communications is also leaving no stone unturned to derive benefits from the growing Business Service Segment, especially, the Small and Medium Businesses (SMBs). However, it remains to be seen whether these approaches can boost its operations and improve its current position in the market. Also these initiatives should help the company fend off competition from the likes of Cablevision Systems Corporation and CenturyLink, Inc. .
Nevertheless, the expected decline in wireless backhaul and residential revenues, access line losses, low cash balance and a highly leveraged balance sheet are potent headwinds. The company also faced an investigation by three state and federal agencies, in relation to a recent service outage of the 911 system in California.
Another Stock to Consider
Frontier Communications is not the only company looking up this earnings season. Here is another company to consider as our model shows that this also has the right combination of elements to post an earnings beat this quarter.
Waters Corporation (WAT - Free Report) , with an earnings ESP of +3.27% and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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Frontier Communications (FTR): Earnings Preview for Q2
Frontier Communications Corporation , a leading regional telecommunication company in the U.S., is scheduled to report second-quarter 2016 financial numbers on Aug 1, after market close.
Last quarter, the company posted an impressive 111.11% positive earnings surprise. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in all of the past four quarters, with an average beat of 206.95%. Let’s see how things are shaping up for this announcement.
FRONTIER COMMUN Price and EPS Surprise
FRONTIER COMMUN Price and EPS Surprise | FRONTIER COMMUN Quote
Why a Likely Positive Surprise?
Our proven model shows that Frontier Communications is likely to beat estimates because it has the right combination of two key elements.
Zacks ESP: Frontier Communications has an Earnings ESP of +25.00%. This is because the Most Accurate estimate stands at a loss of 3 cents while the Zacks Consensus Estimate is pegged at a loss of 4 cents. This is a meaningful and leading indicator of a likely positive earnings surprise.
Zacks Rank: Frontier Communications has a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) have a significantly higher chance of beating estimates. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of Frontier Communications’ Zacks Rank #2 and +25.00% ESP makes us confident of an earnings beat at the company.
What is Driving the Better-than-Expected Earnings?
The purchase of Verizon Communication Inc.’s (VZ - Free Report) wireline assets for $10.5 billion in California, Florida and Texas helped Frontier Communications maintain growth and dividends. We are also optimistic about Frontier Communications’ collaborations with other companies to offer differentiated products. In this regard, the launch of OTT (over the top) services like ‘Freedom TV’ and its premium digital platform to deliver HD TV ultra-fast broadband and enhanced Voice over Internet Protocol (VoIP) services– Vantage – should result in increased market traction.
Meanwhile, management foresees strong broadband subscriber growth in 2016 and expects growth to accelerate on the back of new marketing programs. Frontier Communications is also leaving no stone unturned to derive benefits from the growing Business Service Segment, especially, the Small and Medium Businesses (SMBs). However, it remains to be seen whether these approaches can boost its operations and improve its current position in the market. Also these initiatives should help the company fend off competition from the likes of Cablevision Systems Corporation and CenturyLink, Inc. .
Nevertheless, the expected decline in wireless backhaul and residential revenues, access line losses, low cash balance and a highly leveraged balance sheet are potent headwinds. The company also faced an investigation by three state and federal agencies, in relation to a recent service outage of the 911 system in California.
Another Stock to Consider
Frontier Communications is not the only company looking up this earnings season. Here is another company to consider as our model shows that this also has the right combination of elements to post an earnings beat this quarter.
Waters Corporation (WAT - Free Report) , with an earnings ESP of +3.27% and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>