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Lumen (LUMN) Gears Up for Q3 Earnings: What's in Store?
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Lumen Technologies, Inc. (LUMN - Free Report) is scheduled to report third-quarter 2021 results on Nov 3, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 11.6%, surpassing the Zacks Consensus Estimate by 5 cents.
In the third quarter, the Monroe, LA-based telecommunications company is expected to have recorded lower revenues on a year-over-year basis owing to a challenging macroeconomic environment in the face of the pandemic.
However, Lumen is focused on bolstering its fiber investments across Business and Mass Markets segments, which should position it well for future growth. With improved platform capabilities, the company is making efforts to optimize the Lumen asset portfolio while catering to the dynamic requirements of its wide enterprise customer base on the back of various strategic initiatives.
Factors at Play
During the quarter under review, Lumen partnered with Microsoft Corporation (MSFT - Free Report) to incorporate Microsoft Azure capabilities in the Lumen platform. The partnership will enable businesses and developers to run their Microsoft-based solutions with the Edge Computing services of Lumen, thereby transforming the enterprise application delivery with in-depth insights and customized use cases.
Telco giant, T-Mobile US, Inc. (TMUS - Free Report) , joined forces with Lumen to extend their support to government agencies by rapidly deploying fixed wireless access service at field locations throughout the United States for improved data access and storage, and continuity of operations. As part of the General Services Administration's 15-year, $50 billion Enterprise Infrastructure Solutions program, the wireless access service from these entities is now available to the federal government and public sector agencies. The federal agencies capitalized on T-Mobile’s 5G network and Lumen’s edge computing platform for the deployment initiative.
Lumen secured a contract worth $52 million from the U.S. Army Recruiting Command during the third quarter. It will provide high-speed connectivity to the U.S. Army Recruiting sites as part of this 12-year task order. The company also augmented its fiber network infrastructure in Europe, reinforcing its broadband speed and service capabilities in Switzerland, France, and Spain.
In order to address the growing requirement for more data flow between the United States and Europe, Lumen augmented network capacity across the Trans-Atlantic route from Richmond, VA to Paris, France. The new on-net subsea fiber route leveraged the Google Dunant subsea cable system. Moreover, it unveiled Lumen Edge Private Cloud to increase the capacity required for interaction-intensive applications while connecting them to a global fiber network. The solution is fully managed by Lumen and built on VMware Cloud Foundation and Software-Defined Data Center technology with VMware Cloud Director.
In the third quarter, Lumen announced that it will aid sustainable datacenter developer, Wyoming Hyperscale White Box, with adaptive and reliable networking and security technology solutions. Wyoming Hyperscale intends to launch its first development site in Aspen, WY, in early 2022. Further, the network services provider also teamed up with the U.S. Postal Service (“USPS”) to revamp the latter’s network services on the back of highly resilient broadband, wireless access, and software-defined networking solutions. Lumen will enhance USPS’ network performance and cost-efficiency with real-time network monitoring and analytics. This task order was awarded under a new USPS multi-vendor, indefinite-quantity, indefinite-delivery contract vehicle.
However, a decline in legacy voice services, coupled with economic difficulties as a result of the virus outbreak, is likely to have had an adverse impact on Lumen’s third-quarter revenues. Substitution of its traditional wireline telephone services by wireless and other competitive low-priced offerings together with a massive debt burden might have further dampened its top line in the to-be-reported quarter.
The Zacks Consensus Estimate for total revenues for the third quarter is pegged at $4,920 million, suggesting a fall from the year-earlier reported figure of $5,167 million. The consensus mark for earnings is currently pegged at 38 cents per share, indicating a 5% decline from 40 cents reported in the year-earlier quarter.
Key Q3 Developments
Lumen inked a deal to sell its Latin American business to Stonepeak for $2.7 billion. The transaction is expected to unlock value for Lumen’s shareholders, accelerate investments in key growth areas, and provide flexibility on capital allocation strategy for debt reduction. The deal, subject to regulatory approvals, is expected to be closed in the first half of 2022.
Further, Lumen inked a definitive agreement to sell its ILEC (incumbent local exchange carrier) business in 20 states to Apollo Funds for $7.5 billion. The valuation includes nearly $1.4 billion debt and is subjected to working capital and various other purchase price adjustments. Per the deal, Lumen will hold its ILEC assets in 16 states, as well as its national fiber routes and competitive local exchange carrier networks. The transaction is expected to not only boost Lumen’s diverse asset portfolio but also drive Apollo Funds’ customer base backed by high demand for high-bandwidth connectivity and fiber technology. The deal, which is subjected to regulatory approvals, is estimated to close in the second half of 2022.
Earnings Whispers
Our proven model does not predict an earnings beat for Lumen this time around. 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. This is 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: Lumen’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -7.90% as the former is pegged at 35 cents and the latter at 38 cents.
Here is a company that you may want to consider as our model shows that this has the right combination of elements to post an earnings beat this quarter:
Image: Bigstock
Lumen (LUMN) Gears Up for Q3 Earnings: What's in Store?
Lumen Technologies, Inc. (LUMN - Free Report) is scheduled to report third-quarter 2021 results on Nov 3, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 11.6%, surpassing the Zacks Consensus Estimate by 5 cents.
In the third quarter, the Monroe, LA-based telecommunications company is expected to have recorded lower revenues on a year-over-year basis owing to a challenging macroeconomic environment in the face of the pandemic.
However, Lumen is focused on bolstering its fiber investments across Business and Mass Markets segments, which should position it well for future growth. With improved platform capabilities, the company is making efforts to optimize the Lumen asset portfolio while catering to the dynamic requirements of its wide enterprise customer base on the back of various strategic initiatives.
Factors at Play
During the quarter under review, Lumen partnered with Microsoft Corporation (MSFT - Free Report) to incorporate Microsoft Azure capabilities in the Lumen platform. The partnership will enable businesses and developers to run their Microsoft-based solutions with the Edge Computing services of Lumen, thereby transforming the enterprise application delivery with in-depth insights and customized use cases.
Telco giant, T-Mobile US, Inc. (TMUS - Free Report) , joined forces with Lumen to extend their support to government agencies by rapidly deploying fixed wireless access service at field locations throughout the United States for improved data access and storage, and continuity of operations. As part of the General Services Administration's 15-year, $50 billion Enterprise Infrastructure Solutions program, the wireless access service from these entities is now available to the federal government and public sector agencies. The federal agencies capitalized on T-Mobile’s 5G network and Lumen’s edge computing platform for the deployment initiative.
Lumen secured a contract worth $52 million from the U.S. Army Recruiting Command during the third quarter. It will provide high-speed connectivity to the U.S. Army Recruiting sites as part of this 12-year task order. The company also augmented its fiber network infrastructure in Europe, reinforcing its broadband speed and service capabilities in Switzerland, France, and Spain.
In order to address the growing requirement for more data flow between the United States and Europe, Lumen augmented network capacity across the Trans-Atlantic route from Richmond, VA to Paris, France. The new on-net subsea fiber route leveraged the Google Dunant subsea cable system. Moreover, it unveiled Lumen Edge Private Cloud to increase the capacity required for interaction-intensive applications while connecting them to a global fiber network. The solution is fully managed by Lumen and built on VMware Cloud Foundation and Software-Defined Data Center technology with VMware Cloud Director.
In the third quarter, Lumen announced that it will aid sustainable datacenter developer, Wyoming Hyperscale White Box, with adaptive and reliable networking and security technology solutions. Wyoming Hyperscale intends to launch its first development site in Aspen, WY, in early 2022. Further, the network services provider also teamed up with the U.S. Postal Service (“USPS”) to revamp the latter’s network services on the back of highly resilient broadband, wireless access, and software-defined networking solutions. Lumen will enhance USPS’ network performance and cost-efficiency with real-time network monitoring and analytics. This task order was awarded under a new USPS multi-vendor, indefinite-quantity, indefinite-delivery contract vehicle.
However, a decline in legacy voice services, coupled with economic difficulties as a result of the virus outbreak, is likely to have had an adverse impact on Lumen’s third-quarter revenues. Substitution of its traditional wireline telephone services by wireless and other competitive low-priced offerings together with a massive debt burden might have further dampened its top line in the to-be-reported quarter.
The Zacks Consensus Estimate for total revenues for the third quarter is pegged at $4,920 million, suggesting a fall from the year-earlier reported figure of $5,167 million. The consensus mark for earnings is currently pegged at 38 cents per share, indicating a 5% decline from 40 cents reported in the year-earlier quarter.
Key Q3 Developments
Lumen inked a deal to sell its Latin American business to Stonepeak for $2.7 billion. The transaction is expected to unlock value for Lumen’s shareholders, accelerate investments in key growth areas, and provide flexibility on capital allocation strategy for debt reduction. The deal, subject to regulatory approvals, is expected to be closed in the first half of 2022.
Further, Lumen inked a definitive agreement to sell its ILEC (incumbent local exchange carrier) business in 20 states to Apollo Funds for $7.5 billion. The valuation includes nearly $1.4 billion debt and is subjected to working capital and various other purchase price adjustments. Per the deal, Lumen will hold its ILEC assets in 16 states, as well as its national fiber routes and competitive local exchange carrier networks. The transaction is expected to not only boost Lumen’s diverse asset portfolio but also drive Apollo Funds’ customer base backed by high demand for high-bandwidth connectivity and fiber technology. The deal, which is subjected to regulatory approvals, is estimated to close in the second half of 2022.
Earnings Whispers
Our proven model does not predict an earnings beat for Lumen this time around. 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. This is 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: Lumen’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -7.90% as the former is pegged at 35 cents and the latter at 38 cents.
Lumen Technologies, Inc. Price and EPS Surprise
Lumen Technologies, Inc. price-eps-surprise | Lumen Technologies, Inc. Quote
Zacks Rank: Lumen currently has a Zacks Rank #3.
Stock to Consider
Here is a company that you may want to consider as our model shows that this has the right combination of elements to post an earnings beat this quarter:
Golden Entertainment, Inc. (GDEN - Free Report) is slated to release third-quarter 2021 results on Nov 3. It has an Earnings ESP of +37.45% and currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.