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Telecom Stock Q1 Earnings Due on Apr 25: T, GLW & Others

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We have entered the heart of the Q1 earnings season, with almost 800 companies, including 191 S&P 500 members having reported their results. By the end of this week, we will have crossed the halfway mark in the Q1 reporting cycle, at least for the S&P 500 index. This week, we expect a clearer picture of overall earnings.

As per the latest Earnings Preview, 95 S&P 500 members (accounting for 24.9% of the index’s total membership) have reported their first-quarter earnings results as of Friday, Apr 21. Total earnings for these companies are up 14.3% on 4.6% higher revenues, with 72.6% beating EPS estimates and 62.1% beating revenue estimates. The proportion of companies beating both EPS and revenue estimates is 51.6%.

For Q1 as a whole, we anticipate the pace of growth to improve steadily. In fact, our latest scorecard projects that earnings for the S&P 500 companies are now on track to grow 9.1% from the year-ago period on 6.0% higher revenues. This is comparable to earnings growth of 7.4% in Q4, on 4.8% higher revenues.

Let’s see what’s in store for these five telecommunication companies that are expected to report their first-quarter numbers on Apr 25, 2017.

AT&T Inc. (T - Free Report) , which will report after market close, saw its bottom line match the Zacks Consensus Estimate in three of the previous four quarters, with an average beat of 1.09%. The company’s earnings surpassed the Zacks Consensus Estimate only in the year-ago quarter.

Our quantitative model does not conclusively show that AT&T 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.

AT&T has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 74 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

AT&T Inc. Price and EPS Surprise

 

AT&T Inc. Price and EPS Surprise | AT&T Inc. Quote

AT&T has a Zacks Rank #3 which increases the predictive power of ESP but its 0.00% ESP makes surprise prediction difficult. (Read more: Will AT&T Disappoint Investors this Earnings Season?)

Corning Inc (GLW - Free Report) creates leading-edge technologies for the fastest-growing markets of the world. Notably, the company has a positive record of earnings surprises in three of the trailing four quarters, with an average surprise of 9.95%. Last quarter, Corning reported a positive earnings surprise of 13.64%. In the year-ago quarter, the company’s earnings had matched then Zacks Consensus Estimate.

Corning carries a Zacks Rank #2, which when combined with Earnings ESP of 0.00% (both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 35 cents per share), makes surprise prediction difficult. (Read more: Can Corning Pull Off an Earnings Surprise in Q1?)

Corning Incorporated Price and EPS Surprise

 

Corning Incorporated Price and EPS Surprise | Corning Incorporated Quote

Juniper Networks Inc. (JNPR - Free Report) is a provider of Internet infrastructure solutions that enable Internet service providers and other telecommunications service providers to meet demands resulting from the rapid growth of the Internet. Notably, the company has a mixed record of earnings surprises in the trailing four quarters, with an average surprise of 1.56%. Last quarter, the company’s bottom line matched the Zacks Consensus Estimate but missed the same in the year-ago quarter. The company’s earnings surpassed the Zacks Consensus Estimate in the other two quarters.

Juniper carries a Zacks Rank #3, which when combined with a 0.00% ESP (both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 31 cents per share) makes surprise prediction difficult (Read more: Juniper to Report Q1 Earnings: What's in Store?).

Juniper Networks, Inc. Price and EPS Surprise

 

Juniper Networks, Inc. Price and EPS Surprise | Juniper Networks, Inc. Quote

Mexican telecom behemoth America Movil SAB (AMX - Free Report) posted a negative earnings surprise of 125.00% in the fourth quarter of 2016. Moreover, the company’s earnings lagged the Zacks Consensus Estimate in each of the previous four quarters, with an average miss of 80.60%.

America Movil has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 32 cents. So our proven model cannot conclusively predict an earnings beat for the company although it has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

(Read more: What's in Store for America Movil in Q1 Earnings?)

Telefonaktiebolaget LM Ericsson (publ) (ERIC - Free Report) is a world-leading supplier in the fast-growing and dynamic telecommunications and data communications industry, offering advanced communications solutions for mobile and fixed networks, as well as consumer products.

Last quarter, the company posted a negative earnings surprise of 36.36%. Moreover, the company’s earnings lagged the Zacks Consensus Estimate in each of the previous four quarters, with an average miss of 35.89%. This time, the company carries a Zacks Rank #4 (Sell) and has a 0.00% ESP (both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 3 cents). Hence, as per our quantitative model, chances of an earnings beat are slim (Read more: Ericsson Q1 Earnings: Stock to Disappoint Again?).

Ericsson Price and EPS Surprise

 

Ericsson Price and EPS Surprise | Ericsson Quote

Please note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

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