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VZ, T Q2 Earnings on Jul 24: Here are the Key Predictions
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The earnings season is off to solid start and is likely to replicate the first-quarter performance, which proved to be one of the strongest in the past seven years. About 87 S&P 500 members have already released results till Jul 20. Total earnings for these companies are up 20.9% year over year on 10.3% higher revenues with 86.2% beating earnings estimates and 77% surpassing top-line expectations. Based on the hitherto observed pattern, second-quarter 2018 is anticipated to register healthy double-digit percentage earnings growth on a year-over-year basis.
Per the latest Earnings Preview, overall second-quarter earnings for all the S&P 500 companies are expected to be up 21% on 8.3% growth in revenues. This represents an almost similar growth projection from the previous quarter, which recorded 24.6% earnings growth on 8.7% higher revenues, keeping in mind that actual results typically exceed estimates by 3-5%. Experts widely believe that earnings growth is likely to improve steadily until the end of 2019, as the effect of tax cuts gradually percolates.
The Technology sector, of which Telecom is part, appears to be quite strong. For the sector, earnings are expected to improve 24.5% year over year while revenues are touted to rise 11.4% due to healthy growth dynamics on the back of existing secular trends in cloud computing, artificial intelligence and Big Data.
Let’s take a sneak peek at two major Telecom stocks scheduled to report second-quarter earnings on Jul 24 to see how things are shaping up for the upcoming results.
Verizon Communications Inc. (VZ - Free Report) is scheduled to release results before the opening bell. The company is likely to record higher revenues from the Wireless segment, which accounts for the lion’s share of total revenues, on a year-over-year basis. Verizon is systematically diversifying itself as a major player in the digital content and online advertising space. During second-quarter 2018, Oath — its umbrella firm for digital content subdivisions — introduced new opportunities for brands to engage with consumers through extended reality ad experiences. Buoyed by such tailwinds, the Zacks Consensus Estimate for operating revenues in the Wireless segment in the to-be-reported quarter is currently pegged at $21,774 million, which is relatively higher than the year-ago reported figure of $21,282 million.
For the to-be-reported quarter, the company currently has an Earnings ESP of -0.26%, and Zacks Rank #3 (Hold), making an earnings surprise prediction uncertain. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 for a likely earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. However, our quantitative model had earlier predicted an earnings beat. (Read more: Can Higher Wireless Revenues Aid Verizon's Q2 Earnings?)
Verizon Communications Inc. Price and EPS Surprise
AT&T Inc. (T - Free Report) is scheduled to report results after the closing bell. During the quarter, AT&T received the green signal from the court to go ahead with its proposed deal to buy the mass media and entertainment conglomerate, Time Warner, for $85 billion. In order to augment its foothold in the digital ad sales market, the company also inked an agreement to acquire AppNexus, a technology firm that operates the world’s largest independent marketplace for digital advertising. At the same time, AT&T is gearing up to launch the first standards-based mobile 5G services to consumers in multiple U.S. markets by the end of 2018. With such a holistic growth model, AT&T is likely to record solid performance in the upcoming earnings release. (Read more: Will AT&T Beat Q2 Earnings on Healthy Inorganic Growth?)
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VZ, T Q2 Earnings on Jul 24: Here are the Key Predictions
The earnings season is off to solid start and is likely to replicate the first-quarter performance, which proved to be one of the strongest in the past seven years. About 87 S&P 500 members have already released results till Jul 20. Total earnings for these companies are up 20.9% year over year on 10.3% higher revenues with 86.2% beating earnings estimates and 77% surpassing top-line expectations. Based on the hitherto observed pattern, second-quarter 2018 is anticipated to register healthy double-digit percentage earnings growth on a year-over-year basis.
Per the latest Earnings Preview, overall second-quarter earnings for all the S&P 500 companies are expected to be up 21% on 8.3% growth in revenues. This represents an almost similar growth projection from the previous quarter, which recorded 24.6% earnings growth on 8.7% higher revenues, keeping in mind that actual results typically exceed estimates by 3-5%. Experts widely believe that earnings growth is likely to improve steadily until the end of 2019, as the effect of tax cuts gradually percolates.
The Technology sector, of which Telecom is part, appears to be quite strong. For the sector, earnings are expected to improve 24.5% year over year while revenues are touted to rise 11.4% due to healthy growth dynamics on the back of existing secular trends in cloud computing, artificial intelligence and Big Data.
Let’s take a sneak peek at two major Telecom stocks scheduled to report second-quarter earnings on Jul 24 to see how things are shaping up for the upcoming results.
Verizon Communications Inc. (VZ - Free Report) is scheduled to release results before the opening bell. The company is likely to record higher revenues from the Wireless segment, which accounts for the lion’s share of total revenues, on a year-over-year basis. Verizon is systematically diversifying itself as a major player in the digital content and online advertising space. During second-quarter 2018, Oath — its umbrella firm for digital content subdivisions — introduced new opportunities for brands to engage with consumers through extended reality ad experiences. Buoyed by such tailwinds, the Zacks Consensus Estimate for operating revenues in the Wireless segment in the to-be-reported quarter is currently pegged at $21,774 million, which is relatively higher than the year-ago reported figure of $21,282 million.
For the to-be-reported quarter, the company currently has an Earnings ESP of -0.26%, and Zacks Rank #3 (Hold), making an earnings surprise prediction uncertain. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 for a likely earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. However, our quantitative model had earlier predicted an earnings beat. (Read more: Can Higher Wireless Revenues Aid Verizon's Q2 Earnings?)
Verizon Communications Inc. Price and EPS Surprise
Verizon Communications Inc. Price and EPS Surprise | Verizon Communications Inc. Quote
AT&T Inc. (T - Free Report) is scheduled to report results after the closing bell. During the quarter, AT&T received the green signal from the court to go ahead with its proposed deal to buy the mass media and entertainment conglomerate, Time Warner, for $85 billion. In order to augment its foothold in the digital ad sales market, the company also inked an agreement to acquire AppNexus, a technology firm that operates the world’s largest independent marketplace for digital advertising. At the same time, AT&T is gearing up to launch the first standards-based mobile 5G services to consumers in multiple U.S. markets by the end of 2018. With such a holistic growth model, AT&T is likely to record solid performance in the upcoming earnings release. (Read more: Will AT&T Beat Q2 Earnings on Healthy Inorganic Growth?)
We remain fairly conclusive on an earnings beat prediction this quarter as it has an ESP of +1.09% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
AT&T Inc. Price and EPS Surprise
AT&T Inc. Price and EPS Surprise | AT&T Inc. Quote
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Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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