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CenturyLink (CTL) to Report Q2 Earnings: What's in Store?

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CenturyLink, Inc. (CTL - Free Report) is slated to report second-quarter 2020 results on Aug 5, after the closing bell. In the March-end quarter, the company delivered an earnings surprise of 2.8%. The bottom line topped the Zacks Consensus Estimate by a penny.

The Monroe, LA-based communications company is expected to have recorded lower aggregate revenues on a year-over-year basis. This might be primarily due to economic disruptions stemming from the COVID-19 pandemic.

Let’s discuss the factors that are likely to get reflected in the upcoming quarterly announcement.

Factors at Play

During the quarter under review, CenturyLink launched its Managed Security Behavioral Analytics service package in the Asia Pacific to help organizations detect insider threats on critical assets. The company also expanded its fiber network in many parts of the United States, bringing faster Internet speeds to additional homes and businesses in several cities.

CenturyLink’s network connected more than 14,000 homes in Boulder to gigabit Internet speeds following the completion of a fiber optic construction project. The company expanded its network infrastructure in Ecuador to provide corporate customers with greater speed and broadband availability.

CenturyLink expanded its global SAP alliance to Singapore, enabling customers to access SAP business management solutions backed by its global network. The company got a second task order from the National Aeronautics and Space Administration to manage all of NASA’s voice traffic as well as provide network connectivity to NASA’s more than 15 space centers and regional research facilities. Such developments are likely to have had a positive impact on the company’s second-quarter top line.

For the June-end quarter, the Zacks Consensus Estimate for total revenues is pegged at $5,138 million that indicates a decline of 7.9% from the year-ago quarter’s reported figure. Adjusted earnings per share are pegged at 32 cents, which calls for a decline of 5.9% from the prior-year quarter’s recorded figure.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for CenturyLink this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: CenturyLink’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +4.94% as the former is pegged at 34 cents and the latter at 32 cents.

CenturyLink, Inc. Price and EPS Surprise

CenturyLink, Inc. Price and EPS Surprise

CenturyLink, Inc. price-eps-surprise | CenturyLink, Inc. Quote

Zacks Rank: CenturyLink currently has a Zacks Rank #4 (Sell).

Stocks to Consider

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Watts Water Technologies, Inc. (WTS - Free Report) is slated to release second-quarter 2020 results on Aug 3. It has an Earnings ESP of +18.38% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Foundation Building Materials, Inc. (FBM - Free Report) is scheduled to release second-quarter 2020 results on Aug 3. The company has an Earnings ESP of +28.57% and a Zacks Rank #3.

Curtiss-Wright Corporation (CW - Free Report) has an Earnings ESP of +13.62% and a Zacks Rank of 3. The company is set to report second-quarter 2020 results on Aug 3.

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