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Telecom Stocks Earnings to Watch on Jul 29: SWKS, POLY, VCRA

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The overall Technology sector, of which Telecom is an essential part, is likely to report relatively modest earnings for the April-June quarter compared with other sectors. Despite supply chain disruptions affecting normal business operations of several telecom firms, the sector appears to have been well placed with recurring revenues backed by digital sustainability. Better-than-expected sector revenues with a faster pace of 5G deployment and rapid proliferation of IoT devices amid rising work-from-home trend instill confidence.

Although the sector appears to have overcome the pandemic-induced adversities through gradual resumption of business activities, profitability has largely been compromised. Various trade restrictions on grounds of national security concerns have eroded sector margins, while higher infrastructure investments for 5G networks have increased operating costs. Upfront capital investments for 5G have proven to be substantially higher than prior generations of wireless deployments due to network density requirements, potentially hurting return of capital metrics.

To sum up, although technological advances have changed the way consumers communicate resulting in higher home data consumption and video streaming, intense competition and commoditization of services have limited the chances of benefiting from these trends.   

Per the latest Earnings Preview, total earnings for the Technology sector for the June quarter are expected to be up 34.6% on 18.7% year-over-year higher revenues compared with the respective tallies of 53.9% and 24.4% in the prior quarter.

Let’s take a look at three leading Telecom stocks that are slated to report quarterly results on Jul 29.

Skyworks Solutions Inc. (SWKS - Free Report) is scheduled to report third-quarter fiscal 2021 results after the closing bell. For the third quarter of fiscal 2021, Skyworks expects GAAP revenues of $1.075 billion to $1.125 billion (mid-point being $1.10 billion), representing revenue growth of 49% at the mid-point. The Zacks Consensus Estimate for the same is pegged at $1.10 billion. The company recorded revenues of $737 million in the year-earlier quarter. Non-GAAP earnings are anticipated to be $2.13 per share, implying growth of 70% year over year. The consensus mark for earnings is currently pegged at $2.13 per share. Skyworks recorded non-GAAP earnings of $1.25 per share in the prior-year quarter.

Our proven model does not predict an earnings beat for Skyworks this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.

Skyworks currently has an Earnings ESP of -0.12% and a Zacks Rank #2.

Skyworks Solutions, Inc. Price and EPS Surprise

Skyworks Solutions, Inc. Price and EPS Surprise

Skyworks Solutions, Inc. price-eps-surprise | Skyworks Solutions, Inc. Quote

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Skyworks is riding on momentum in 5G and Wi-Fi 6 solutions that is likely to have driven its top line in the to-be-reported quarter. Demand continues to be high owing to increased need for high-speed connectivity amid the COVID-19-induced surge in remote-work, video-streaming and web-based learning trends. Newly released 3GPP standards have validated the extension of 5G technology into Internet of Things, Vehicle-to-everything and other services. This is likely to have stoked demand for Skyworks’ 5G solutions in the quarter under review.

Plantronics, Inc. (POLY - Free Report) is scheduled to report first-quarter fiscal 2022 results, after the closing bell. The company expects GAAP revenues between $410 million and $430 million. The consensus mark for revenues is pegged at $418 million, which suggests an improvement of 17.4% from the year-ago quarter’s reported figure. Non-GAAP adjusted earnings are anticipated to be between 35 cents and 55 cents. The Zacks Consensus Estimate for earnings is pegged at 46 cents per share. The figure indicates an improvement of 39.4% from the year-ago quarter’s reported figure.  

Plantronics currently has an Earnings ESP of -4.87% and a Zacks Rank #3.

Plantronics, Inc. Price and EPS Surprise

Plantronics, Inc. Price and EPS Surprise

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

You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is benefiting from the massive shift toward reliable, high-fidelity solutions for hybrid work and video collaboration. The increased adoption of technologies such as UC&C, Bluetooth, Voice over Internet Protocol, Digital Signal Processing, Digital Enhanced Cordless Telecommunications and Video-as-a-Service has contributed to higher demand for its solutions. The solutions combine hardware with innovative sensor technology and software functionality for an integrated communication system and are likely to play an increasingly important role for improved productivity in the work-from-home environment with simple user interfaces as people navigate connectivity challenges.

Vocera Communications, Inc. (VCRA - Free Report) is scheduled to report second-quarter results after the closing bell. The consensus mark for revenues is pegged at $54 million, which suggests an improvement of 14.9% from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for earnings is pegged at 8 cents per share. The figure indicates a decline of 20% from the year-ago quarter’s reported figure.  

The company is likely to have generated incremental revenues from acquisitions and solid traction from healthcare systems. The improving market conditions offer strong visibility for long-term growth. However, high operating and acquisition-related costs are likely to have adversely impacted its bottom line in the to-be-reported quarter. Vocera has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell).


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Skyworks Solutions, Inc. (SWKS) - free report >>

Vocera Communications, Inc. (VCRA) - free report >>

Plantronics, Inc. (POLY) - free report >>