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Can BCE Inc. (BCE) Spring a Surprise this Earnings Season?
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Leading Canadian telephone operator BCE Inc. (BCE - Free Report) is scheduled to report third-quarter 2016 results on Nov 3, before the opening bell.
Last quarter, the company posted a negative earnings surprise of 7.04%. However, the company’s earnings surpassed the Zacks Consensus Estimate in two of the previous four quarters, with an average beat of 0.76%. Let’s see how things are shaping up for this announcement.
Factors Likely to Influence this Quarter
BCE’s subsidiary, Bell Canada is leading the Canadian broadband communications market through its recent launch of Home Hub 3000 WiFi services with Wireless 4K Whole Home PVR from Fibe TV. Increasing deployment of Gigabit Fibe, 4G LTE mobile networks, upcoming 5G networks, IP phone services and post-paid businesses should help the company gain customers and also put a check on churn. BCE’s recent acquisition of Q9 Networks should boost its cloud suite. The company also continues to invest in LTE, broadband and fiber to provide additional capacity on Internet and wireless networks. On the wireline front, BCE expects financial results to improve in 2016 and beyond as it gains from an increase in net revenue generation units.
However, BCE’s strategic moves to enhance employee skills, increase capital investments and reduce expenditures may impact financials and growth prospects if not executed properly. Moreover, stringent regulatory measures, decline in network access services lines, price competition, exposure to labor union issues covered by collective bargaining agreements leading to work disruptions and higher labor costs, operational risks and construction and launch delays are major risks. In the wireless segment, BCE competes against the likes of Rogers Communications Inc. (RCI - Free Report) and TELUS Corporation (TU - Free Report) as well as small regional carriers in Canada.
Earnings Whispers
Our proven model does not conclusively show that BCE is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: BCE has an earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 69 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: BCE has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Meanwhile, 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 momentum.
Here is a company that has the right combination of elements to post an earnings beat this quarter.
Verizon Communications Inc. (VZ - Free Report) , with an earnings ESP of +1.11% and a Zacks Rank #3.You can see the complete list of today’s Zacks #1 Rank stocks here. The company’s earnings surpassed the Zacks Consensus Estimate in three of the previous four quarters.
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Can BCE Inc. (BCE) Spring a Surprise this Earnings Season?
Leading Canadian telephone operator BCE Inc. (BCE - Free Report) is scheduled to report third-quarter 2016 results on Nov 3, before the opening bell.
Last quarter, the company posted a negative earnings surprise of 7.04%. However, the company’s earnings surpassed the Zacks Consensus Estimate in two of the previous four quarters, with an average beat of 0.76%. Let’s see how things are shaping up for this announcement.
Factors Likely to Influence this Quarter
BCE’s subsidiary, Bell Canada is leading the Canadian broadband communications market through its recent launch of Home Hub 3000 WiFi services with Wireless 4K Whole Home PVR from Fibe TV. Increasing deployment of Gigabit Fibe, 4G LTE mobile networks, upcoming 5G networks, IP phone services and post-paid businesses should help the company gain customers and also put a check on churn. BCE’s recent acquisition of Q9 Networks should boost its cloud suite. The company also continues to invest in LTE, broadband and fiber to provide additional capacity on Internet and wireless networks. On the wireline front, BCE expects financial results to improve in 2016 and beyond as it gains from an increase in net revenue generation units.
However, BCE’s strategic moves to enhance employee skills, increase capital investments and reduce expenditures may impact financials and growth prospects if not executed properly. Moreover, stringent regulatory measures, decline in network access services lines, price competition, exposure to labor union issues covered by collective bargaining agreements leading to work disruptions and higher labor costs, operational risks and construction and launch delays are major risks. In the wireless segment, BCE competes against the likes of Rogers Communications Inc. (RCI - Free Report) and TELUS Corporation (TU - Free Report) as well as small regional carriers in Canada.
Earnings Whispers
Our proven model does not conclusively show that BCE is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: BCE has an earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 69 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: BCE has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Meanwhile, 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 momentum.
BCE INC Price and EPS Surprise
BCE INC Price and EPS Surprise | BCE INC Quote
Stock to Consider
Here is a company that has the right combination of elements to post an earnings beat this quarter.
Verizon Communications Inc. (VZ - Free Report) , with an earnings ESP of +1.11% and a Zacks Rank #3.You can see the complete list of today’s Zacks #1 Rank stocks here. The company’s earnings surpassed the Zacks Consensus Estimate in three of the previous four quarters.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>