Telecom service provider Cincinnati Bell Inc. is slated to report first-quarter 2017 results on May 9, before the opening bell.
In the fourth quarter of 2016, the company delivered a negative earnings surprise of 66.67%. Cincinnati Bell’s performance in certain metrics – net income, total revenue and operating income – were disappointing. We look forward to seeing the company’s conduct in the to-be reported quarter.
The company’s earnings lagged the Zacks Consensus Estimate in three of the previous four quarters, the average miss being 45.84%.
Let’s see how things are shaping up for this announcement.
Factors at Play
We are impressed with Cincinnati Bell’s efforts to transform itself from a legacy copper-based telecommunications company to an IT company with contemporary fiber assets offering flexible data, video, voice and IP solutions to consumers and business clients.
In the Entertainment and Communications business, the company’s investment in Fioptics products led to revenue growth and subscriber addition in the last reported fourth-quarter of 2016. We expect to see a similar uptrend in terms of growth and subscriber addition in the Fioptics Internet and video segment in the to-be reported quarter.
In this regard, the introduction of MyTV through its Fioptics high-speed Internet service bodes well. Increased investments in strategic products, the creation of a new business division for small and mid-sized businesses and the development of its IT Services and Hardware division should also rake in more profits.
Offering of eero inc’s whole-home Wi-Fi system at its retail stores should help Cincinnati Bell in expanding its FTTH (fiber to the home) customer base. The company’s decision to expand its call centre base by hiring 300 more employees has added to the region’s economic development. Cincinnati Bell’s efforts to expand its unified communications and cloud services by inking different deals look impressive.
The price performance of Cincinnati Bell was depressing. Over the past three months, the company’s shares have witnessed a loss of 22.2% compared with the Zacks categorized Diversified Communication Services industry’s growth of 6.2%.
Continuous erosion in local access lines, heavy capital expenditure, legal hurdles and a weakening cash and liquidity position of the company are headwinds. Intense competition in the company’s operational region can be a drag on its pricing power, inducing pressure on margins.
Cincinnati Bell recently faced opposition to its Local Area Service (LAS) discontinuation within the Kentucky region, from consumers and industry groups, citing concerns over the shutdown of POTS. CenturyLink Inc. and Windstream Holdings, Inc. faced similar issues from consumers and clients regarding their requests to liquidate Frame Relay and small to medium-sized business digital subscriber line services.
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 a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). This is not the case here as elaborated below.
Zacks ESP: Cincinnati Bell has an Earnings ESP of 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 1 cent. You can uncover the best stocks to buy or sell before they’re reported with ourEarnings ESP Filter.
Zacks Rank: Cincinnati Bell has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Key Pick
Here is a company in the Zacks categorized broader Utilities sector, which houses Cincinnati Bell and has the right components to deliver an earnings beat this quarter.
Pattern Energy Group Inc. is expected to report first-quarter 2017 results on May 9. It has an Earnings ESP of +250.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
Image: Bigstock
What Lies Ahead for Cincinnati Bell (CBB) in Q1 Earnings?
Telecom service provider Cincinnati Bell Inc. is slated to report first-quarter 2017 results on May 9, before the opening bell.
In the fourth quarter of 2016, the company delivered a negative earnings surprise of 66.67%. Cincinnati Bell’s performance in certain metrics – net income, total revenue and operating income – were disappointing. We look forward to seeing the company’s conduct in the to-be reported quarter.
The company’s earnings lagged the Zacks Consensus Estimate in three of the previous four quarters, the average miss being 45.84%.
Let’s see how things are shaping up for this announcement.
Factors at Play
We are impressed with Cincinnati Bell’s efforts to transform itself from a legacy copper-based telecommunications company to an IT company with contemporary fiber assets offering flexible data, video, voice and IP solutions to consumers and business clients.
In the Entertainment and Communications business, the company’s investment in Fioptics products led to revenue growth and subscriber addition in the last reported fourth-quarter of 2016. We expect to see a similar uptrend in terms of growth and subscriber addition in the Fioptics Internet and video segment in the to-be reported quarter.
In this regard, the introduction of MyTV through its Fioptics high-speed Internet service bodes well. Increased investments in strategic products, the creation of a new business division for small and mid-sized businesses and the development of its IT Services and Hardware division should also rake in more profits.
Offering of eero inc’s whole-home Wi-Fi system at its retail stores should help Cincinnati Bell in expanding its FTTH (fiber to the home) customer base. The company’s decision to expand its call centre base by hiring 300 more employees has added to the region’s economic development. Cincinnati Bell’s efforts to expand its unified communications and cloud services by inking different deals look impressive.
The price performance of Cincinnati Bell was depressing. Over the past three months, the company’s shares have witnessed a loss of 22.2% compared with the Zacks categorized Diversified Communication Services industry’s growth of 6.2%.
Continuous erosion in local access lines, heavy capital expenditure, legal hurdles and a weakening cash and liquidity position of the company are headwinds. Intense competition in the company’s operational region can be a drag on its pricing power, inducing pressure on margins.
Cincinnati Bell recently faced opposition to its Local Area Service (LAS) discontinuation within the Kentucky region, from consumers and industry groups, citing concerns over the shutdown of POTS. CenturyLink Inc. and Windstream Holdings, Inc. faced similar issues from consumers and clients regarding their requests to liquidate Frame Relay and small to medium-sized business digital subscriber line services.
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 a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). This is not the case here as elaborated below.
Zacks ESP: Cincinnati Bell has an Earnings ESP of 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 1 cent. You can uncover the best stocks to buy or sell before they’re reported with ourEarnings ESP Filter.
Zacks Rank: Cincinnati Bell has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Cincinnati Bell Inc Price and EPS Surprise
Cincinnati Bell Inc Price and EPS Surprise | Cincinnati Bell Inc Quote
Key Pick
Here is a company in the Zacks categorized broader Utilities sector, which houses Cincinnati Bell and has the right components to deliver an earnings beat this quarter.
Pattern Energy Group Inc. is expected to report first-quarter 2017 results on May 9. It has an Earnings ESP of +250.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>