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Telecom Stocks Earnings to Watch on Nov 4: MSI, SWKS & More

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The Technology sector, of which Telecom is an integral part, is likely to report modest earnings for the July-September quarter compared with other sectors. Despite supply-chain disruptions due to the worldwide shortage of semiconductors affecting the operations of telecom companies, the sector seems to have been well-placed with recurring revenues on the back of digital acceleration. Better-than-expected sector revenues with a faster pace of 5G deployment and rapid proliferation of IoT devices amid the work-from-home trend instill optimism.

Though the sector appears to have overcome the pandemic-induced adversities through the 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 previous generations of wireless deployments due to network density requirements, hurting the return on capital.

While technological progress has changed the way consumers communicate resulting in higher home data consumption and video streaming, intense competition and commoditization of services have limited the chances for companies to benefit from these trends.

Per the latest Earnings Preview, total earnings for the Technology sector for the quarter ended September 2021 are expected to be up 21.4% on 16.4% year-over-year higher revenues compared with the actuals of 61.5% and 24.5% in second-quarter 2021.

Let’s take a look at four leading Telecom stocks that are slated to report quarterly results on Nov 4.

Motorola Solutions, Inc. (MSI - Free Report) is set to report third-quarter 2021 results after the closing bell. The company is expected to have recorded year-over-year higher revenues on the back of growth in both segments — Products and Systems Integration, and Services and Software. It continues to benefit from the increasing demand for its mission-critical technologies in North America and globally. The Zacks Consensus Estimate for revenues for the quarter is pegged at $2,060 million, which indicates growth of 10.3% from the year-ago quarter’s reported figure. The consensus estimate for adjusted earnings per share is pegged at $2.13, which suggests an increase of 9.2%.

Our proven model doesn’t conclusively predict an earnings beat for Motorola 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. But that’s not the case here.

Motorola currently has an Earnings ESP of 0.00% and a Zacks Rank #3.

Motorola Solutions, Inc. Price and EPS Surprise

Motorola Solutions, Inc. Price and EPS Surprise

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

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

During the third quarter, Motorola provided the Transmission System Operator for the Trans Adriatic Pipeline with a digital radio solution to secure voice and data communications along the multinational route of the gas pipeline. The company acquired Openpath Security Inc., a leader in cloud-based access control solutions, for $297 million. Adding to its video security and analytics portfolio, Motorola introduced the Compass Decision Management System, which provides organizations with security intelligence that helps users prevent human error by outlining standard procedures, automating incident reporting, and highlighting key performance indicators. The National Health Service England selected Motorola’s VB400 body-worn video solution to improve transparency and safety for its frontline workers and citizens across the country. These developments are likely to have had a positive impact on Motorola’s performance in the quarter to be reported.

Skyworks Solutions, Inc. (SWKS - Free Report) is scheduled to release fourth-quarter fiscal 2021 results after the closing bell. A solid uptake of 5G and Wi-Fi 6 solutions might have driven the company’s top line. Skyworks continues to benefit from the growing demand for high-speed connectivity amid the pandemic-triggered surge in remote-work and hybrid work innovation, video-streaming, and web-based learning trends. The Zacks Consensus Estimate for revenues is pegged at $1,302 million, which indicates growth of 36.1% from the year-ago quarter’s reported figure. The consensus estimate for earnings per share is pegged at $2.54, which suggests an increase of 37.3%.

Skyworks currently has an Earnings ESP of 0.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Skyworks Solutions, Inc. Price and EPS Surprise

Skyworks Solutions, Inc. Price and EPS Surprise

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

The acquisition of the Infrastructure & Automotive business of Silicon Laboratories has expanded Skyworks’ market opportunity. It continues to win deals from OEMs like Motorola, Samsung, Oppo, Vivo, and Xiaomi. Increasing demand for 5G handsets, especially in China, augurs well. The recently released 3GPP standards that validate the extension of 5G technology into the Internet of Things, Vehicle-to-Everything, and other services are likely to have aided the performance.

Altice USA, Inc. (ATUS - Free Report) is set to report third-quarter 2021 results after the closing bell. The company is focused on accelerating its network expansion, along with market penetration, for long-term sustainable growth. The Zacks Consensus Estimate for revenues is pegged at $2,507 million, which indicates growth of 3% from the year-ago quarter’s reported figure. The consensus estimate for earnings per share is pegged at 50 cents, which suggests a rise of 47.1%.

Altice currently has an Earnings ESP of +3.31% and a Zacks Rank #4 (Sell).

Altice USA, Inc. Price and EPS Surprise

Altice USA, Inc. Price and EPS Surprise

Altice USA, Inc. price-eps-surprise | Altice USA, Inc. Quote

The company is likely to have generated year-over-year higher broadband revenues along with growth in its subscriber base. The acquisition of Morris Broadband, LLC has extended Altice’s footprint in North Carolina. It is likely to have benefited from greater scale, operating efficiency, and additional investments, which are at the core of its business strategy.

Viasat, Inc. (VSAT - Free Report) is scheduled to report second-quarter fiscal 2022 results before the opening bell. The Zacks Consensus Estimate for its revenues is pegged at $682 million, which indicates growth of 23.1% from the year-ago quarter’s reported figure. The consensus estimate for earnings per share is pegged at 11 cents, which suggests a surge of 266.7%.

Viasat currently has an Earnings ESP of 0.00% and a Zacks Rank #3.

Viasat Inc. Price and EPS Surprise

Viasat Inc. Price and EPS Surprise

Viasat Inc. price-eps-surprise | Viasat Inc. Quote

The company is likely to have benefited from year-over-year higher product and service revenues. The Satellite Services segment is progressing well, thanks to the improving in-flight connectivity service revenues with growth in fixed broadband business resulting from higher bandwidth service plans. The company is focused on the launch of ViaSat-3 global constellation. Strength in the ground antenna systems business, along with earth imaging and observation bandwidth demands, is likely to boost ground infrastructure products and services.