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Satellite Communication Q2 Earnings Ahead: SATS, ORBC & More
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We are in the last leg of second-quarter earnings season but the pessimistic view of a negative earnings growth in the market consensus still linger but the view seems to have subsided as the season has progressed. Our Earnings Preview predicts a 3.4% year-over-year drop in earnings of S&P 500 companies on account of 0.4% lower revenues. Thus, the quarter is still expected to be in the negative territory for the fifth straight quarter. Additionally, growth estimates for third-quarter 2016 are starting to lean into the negative as well. However, we anticipate a change in the last quarter of the year with expectations of growth in earnings to pick up.
While our data points to the fifth consecutive quarter of an earnings decline, we focus on some satellite communication stocks that are expected to report their second-quarter 2016 results on Aug 4.
Satellite Industry in a Nutshell
Satellite communication on its path to becoming a global industry has had its share of earnings debacles and failures due to unprofitable business models. However with time these companies have developed into very successful, in turn lucrative options for investors looking for a boost to their portfolio. As better satellite-receiving technology finds its way into more and more consumer devices, the possibilities are growing and the success creating very prominent revenue footprints for these rapidly expanding companies. The industry is ranked 164 out of 250 industries in the Zacks Industry Rank list. As per the Zacks Industry Rank guideline, the outlook for this particular industry is neutral.
EchoStar Corp. (SATS - Free Report) engages in digital set-top box business and a fixed satellite services business. The company has a Zacks Rank #4 (Sell) and an Earnings ESP of 4.35%. This is because the Most Accurate estimate currently stands at 48 cents while the broader Zacks Consensus Estimate stands lower at 46 cents. Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Norsat International Inc. is a pioneering company which has established a solid history of developing innovative and high quality products. The company has a Zacks Rank #3 (Hold) and an Earnings ESP of 0.00%. This is because both Most Accurate estimate and the Zacks Consensus Estimate stand at 16 cents. As per our model, this combination of Norsat doesn’t conclusively show that it is likely to beat the Zacks Consensus Estimate this quarter.
ORBCOMM, Inc. is a leading global satellite data communications company, focused on Machine-to-Machine communications. ORBCOMM has a combination of a Zacks Rank #3 and an Earnings ESP of 1.70%. This is because the Most Accurate estimate currently stands at a loss of 3 cents while the broader Zacks Consensus Estimate is pegged at a loss of 4 cents. ORBCOMM’s combination of Zacks Rank #3 and a positive ESP makes us confident of an earnings beat this quarter.
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Satellite Communication Q2 Earnings Ahead: SATS, ORBC & More
We are in the last leg of second-quarter earnings season but the pessimistic view of a negative earnings growth in the market consensus still linger but the view seems to have subsided as the season has progressed. Our Earnings Preview predicts a 3.4% year-over-year drop in earnings of S&P 500 companies on account of 0.4% lower revenues. Thus, the quarter is still expected to be in the negative territory for the fifth straight quarter. Additionally, growth estimates for third-quarter 2016 are starting to lean into the negative as well. However, we anticipate a change in the last quarter of the year with expectations of growth in earnings to pick up.
While our data points to the fifth consecutive quarter of an earnings decline, we focus on some satellite communication stocks that are expected to report their second-quarter 2016 results on Aug 4.
Satellite Industry in a Nutshell
Satellite communication on its path to becoming a global industry has had its share of earnings debacles and failures due to unprofitable business models. However with time these companies have developed into very successful, in turn lucrative options for investors looking for a boost to their portfolio. As better satellite-receiving technology finds its way into more and more consumer devices, the possibilities are growing and the success creating very prominent revenue footprints for these rapidly expanding companies. The industry is ranked 164 out of 250 industries in the Zacks Industry Rank list. As per the Zacks Industry Rank guideline, the outlook for this particular industry is neutral.
EchoStar Corp. (SATS - Free Report) engages in digital set-top box business and a fixed satellite services business. The company has a Zacks Rank #4 (Sell) and an Earnings ESP of 4.35%. This is because the Most Accurate estimate currently stands at 48 cents while the broader Zacks Consensus Estimate stands lower at 46 cents. Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
ECHOSTAR CORP Price and EPS Surprise
ECHOSTAR CORP Price and EPS Surprise | ECHOSTAR CORP Quote
Norsat International Inc. is a pioneering company which has established a solid history of developing innovative and high quality products. The company has a Zacks Rank #3 (Hold) and an Earnings ESP of 0.00%. This is because both Most Accurate estimate and the Zacks Consensus Estimate stand at 16 cents. As per our model, this combination of Norsat doesn’t conclusively show that it is likely to beat the Zacks Consensus Estimate this quarter.
NORSAT INTL INC Price and EPS Surprise
NORSAT INTL INC Price and EPS Surprise | NORSAT INTL INC Quote
ORBCOMM, Inc. is a leading global satellite data communications company, focused on Machine-to-Machine communications. ORBCOMM has a combination of a Zacks Rank #3 and an Earnings ESP of 1.70%. This is because the Most Accurate estimate currently stands at a loss of 3 cents while the broader Zacks Consensus Estimate is pegged at a loss of 4 cents. ORBCOMM’s combination of Zacks Rank #3 and a positive ESP makes us confident of an earnings beat this quarter.
ORBCOMM INC Price and EPS Surprise
ORBCOMM INC Price and EPS Surprise | ORBCOMM INC Quote
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