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Can Level 3 Communications (LVLT) Q4 Earnings Surprise?
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Level 3 Communications Inc. , the leading U.S. fiber-optic network service provider, is slated to report fourth-quarter 2016 financial numbers, after the market closes on Feb 8.
Last quarter, Level 3 Communications posted a negative earnings surprise of 11.36%. Moreover, the company’s earnings lagged the Zacks Consensus Estimate in two of the previous four quarters, with an average miss of 5.69%.
Shares of Level 3 Communications have outperformed the Zacks categorized ‘Comm Infrastructure’ industry’s growth over the past three months. The stock has returned 13.65%, beating the industry’s growth of 7.10% over the same time span.
Let’s see how things are shaping up for this announcement.
Factors at Play
Level 3 Communications operates in a highly competitive enterprise communications market. Inspite of its vast presence in the fiber market of Latin America, Europe, Middle East and Asia, it has to compete with telecom behemoths like Verizon Communications Inc. (VZ - Free Report) and AT&T Inc. (T - Free Report) in North America and with Telefonica, Orange, BT Group, America Movil in Europe and Latin America.
Moreover, fluctuations in the global macro economy could have an adverse effect on the company’s business, results of operations and financial condition. Notably, the company faces the risk of adverse foreign currency movements that may impact its top line. Also, the company’s high customer concentrationis a major concern.
Nevertheless, the company has a strong presence in fields of enterprise networking like data networks, content distribution, managed services, securities, voice cloud and cloud connection. The company continues to benefit from the ongoing trend of large enterprise customers shifting to IP and fiber-based network architecture.
Additionally, the company is on the lookout for strategic mergers and acquisitions or stock buyouts to maximize shareholders’ value. Further, the combined entity of Level 3 Communications and CenturyLink will be a formidable force in the fiber-based, metro-Ethernet and Internet backbone market.
Earnings Whispers
Our proven model does not conclusively show that Level 3 Communications 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: Level 3 Communications has an Earnings ESP of +4.55%. This is because the Most Accurate estimate stands at 46 cents while the Zacks Consensus Estimate is pegged higher at 44 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Level 3 Communications has a Zacks Rank #4 (Sell).
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Level 3 Communications, Inc. Price and EPS Surprise
Here is a company that has the right combination of elements to post an earnings beat this quarter.
Applied Optoelectronics, Inc. (AAOI - Free Report) is scheduled to release fourth-quarter 2016 financial results on Feb 23, 2017.Its earnings surpassed the Zacks Consensus Estimate in two of the previous four quarters, with an average beat of 106.74%. It currently has an Earnings ESP of +15.87% and a Zacks Rank #1.You can see the complete list of today’s Zacks #1 Rank stocks here.
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Can Level 3 Communications (LVLT) Q4 Earnings Surprise?
Level 3 Communications Inc. , the leading U.S. fiber-optic network service provider, is slated to report fourth-quarter 2016 financial numbers, after the market closes on Feb 8.
Last quarter, Level 3 Communications posted a negative earnings surprise of 11.36%. Moreover, the company’s earnings lagged the Zacks Consensus Estimate in two of the previous four quarters, with an average miss of 5.69%.
Shares of Level 3 Communications have outperformed the Zacks categorized ‘Comm Infrastructure’ industry’s growth over the past three months. The stock has returned 13.65%, beating the industry’s growth of 7.10% over the same time span.
Let’s see how things are shaping up for this announcement.
Factors at Play
Level 3 Communications operates in a highly competitive enterprise communications market. Inspite of its vast presence in the fiber market of Latin America, Europe, Middle East and Asia, it has to compete with telecom behemoths like Verizon Communications Inc. (VZ - Free Report) and AT&T Inc. (T - Free Report) in North America and with Telefonica, Orange, BT Group, America Movil in Europe and Latin America.
Moreover, fluctuations in the global macro economy could have an adverse effect on the company’s business, results of operations and financial condition. Notably, the company faces the risk of adverse foreign currency movements that may impact its top line. Also, the company’s high customer concentrationis a major concern.
Nevertheless, the company has a strong presence in fields of enterprise networking like data networks, content distribution, managed services, securities, voice cloud and cloud connection. The company continues to benefit from the ongoing trend of large enterprise customers shifting to IP and fiber-based network architecture.
Additionally, the company is on the lookout for strategic mergers and acquisitions or stock buyouts to maximize shareholders’ value. Further, the combined entity of Level 3 Communications and CenturyLink will be a formidable force in the fiber-based, metro-Ethernet and Internet backbone market.
Earnings Whispers
Our proven model does not conclusively show that Level 3 Communications 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: Level 3 Communications has an Earnings ESP of +4.55%. This is because the Most Accurate estimate stands at 46 cents while the Zacks Consensus Estimate is pegged higher at 44 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Level 3 Communications has a Zacks Rank #4 (Sell).
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Level 3 Communications, Inc. Price and EPS Surprise
Level 3 Communications, Inc. Price and EPS Surprise | Level 3 Communications, Inc. Quote
A Key Pick
Here is a company that has the right combination of elements to post an earnings beat this quarter.
Applied Optoelectronics, Inc. (AAOI - Free Report) is scheduled to release fourth-quarter 2016 financial results on Feb 23, 2017.Its earnings surpassed the Zacks Consensus Estimate in two of the previous four quarters, with an average beat of 106.74%. It currently has an Earnings ESP of +15.87% and a Zacks Rank #1.You can see the complete list of today’s Zacks #1 Rank stocks here.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>