The Q3 earning season so far has seen better earnings and revenue growth than in the past few quarters. Notably, a larger number of companies are beating Street estimates, with the Finance sector leading the way. Given the favorable earnings picture, this earnings season is on track to be the first quarter to record positive earnings growth after five quarters of back-to-back declines. As per our latest Earnings Preview, aggregate Q3 earnings are now expected to be up 0.1% from the same period last year on the back of 1.5% higher revenues – better than our initial expectation of an earnings decline of 2.9% at the start of the month. Moreover, we expect the trend to continue in the upcoming quarters.
Telecom Stocks in Focus
The telecom industry – which comprises telecom operators and equipment manufacturers – is likely to witness reasonable growth through 2016. We believe that continuous advancement in technologies and adoption of newer business models are aiding this industry to improve its revenues.
We focus on four telecom stocks that are scheduled to report their quarterly financial results on Oct 27
Cypress Semiconductor Corporation designs, develops, manufactures and markets a broad line of high-performance digital and mixed-signal integrated circuits for telecommunications, computers, and instrumentation systems. The stock currently sports a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The stock has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at 8 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises. According to our proven model, a company needs the right combination of two key ingredients – a positive Earnings ESP and a Zacks Rank #3 or better – to increase the odds of an earnings surprise. Thus, Cypress Semiconductor isn’t likely to beat the Zacks Consensus Estimate this quarter.
InterDigital, Inc.(IDCC - Free Report) develops and markets advanced digital wireless telecommunications systems. InterDigital has a combination of a Zacks Rank #1 (Strong Buy) and an Earnings ESP of -2.66%. This is because the Most Accurate estimate currently stands at $2.93 while the Zacks Consensus Estimate is pegged at $3.01. Though the company’s Zacks Rank #1 increases the predictive power of ESP, its negative ESP makes surprise prediction difficult.
Gigamon Inc. is engaged in providing intelligent Traffic Visibility solutions for enterprises, data centers and service providers. This Zacks Rank #4 (Sell) stock has an Earnings ESP of 0.00% as both the Most Accurate and the Zacks Consensus Estimate are pegged at 13 cents. Please note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement. (Read more: Gigamon Q3 Earnings: Will the Stock Disappoint?)
NeuStar, Inc. is a provider of essential clearinghouse services to the North American communications industry and Internet service providers around the world. NeuStar has a combination of a Zacks Rank #3 and an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.20. The combination doesn’t conclusively show that it is likely to beat the Zacks Consensus Estimate this quarter.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
The Q3 earning season so far has seen better earnings and revenue growth than in the past few quarters. Notably, a larger number of companies are beating Street estimates, with the Finance sector leading the way. Given the favorable earnings picture, this earnings season is on track to be the first quarter to record positive earnings growth after five quarters of back-to-back declines. As per our latest Earnings Preview, aggregate Q3 earnings are now expected to be up 0.1% from the same period last year on the back of 1.5% higher revenues – better than our initial expectation of an earnings decline of 2.9% at the start of the month. Moreover, we expect the trend to continue in the upcoming quarters.
Telecom Stocks in Focus
The telecom industry – which comprises telecom operators and equipment manufacturers – is likely to witness reasonable growth through 2016. We believe that continuous advancement in technologies and adoption of newer business models are aiding this industry to improve its revenues.
We focus on four telecom stocks that are scheduled to report their quarterly financial results on Oct 27
Cypress Semiconductor Corporation designs, develops, manufactures and markets a broad line of high-performance digital and mixed-signal integrated circuits for telecommunications, computers, and instrumentation systems. The stock currently sports a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The stock has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at 8 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises. According to our proven model, a company needs the right combination of two key ingredients – a positive Earnings ESP and a Zacks Rank #3 or better – to increase the odds of an earnings surprise. Thus, Cypress Semiconductor isn’t likely to beat the Zacks Consensus Estimate this quarter.
InterDigital, Inc.(IDCC - Free Report) develops and markets advanced digital wireless telecommunications systems. InterDigital has a combination of a Zacks Rank #1 (Strong Buy) and an Earnings ESP of -2.66%. This is because the Most Accurate estimate currently stands at $2.93 while the Zacks Consensus Estimate is pegged at $3.01. Though the company’s Zacks Rank #1 increases the predictive power of ESP, its negative ESP makes surprise prediction difficult.
Gigamon Inc. is engaged in providing intelligent Traffic Visibility solutions for enterprises, data centers and service providers. This Zacks Rank #4 (Sell) stock has an Earnings ESP of 0.00% as both the Most Accurate and the Zacks Consensus Estimate are pegged at 13 cents. Please note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement. (Read more: Gigamon Q3 Earnings: Will the Stock Disappoint?)
NeuStar, Inc. is a provider of essential clearinghouse services to the North American communications industry and Internet service providers around the world. NeuStar has a combination of a Zacks Rank #3 and an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.20. The combination doesn’t conclusively show that it is likely to beat the Zacks Consensus Estimate this quarter.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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