We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will U.S. Cellular (USM) Disappoint this Earnings Season?
Read MoreHide Full Article
United States Cellular Corp. (USM - Free Report) , the wireless subsidiary of Telephone & Data Systems Inc. (TDS - Free Report) , is slated to report fourth-quarter 2016 results on Feb 24, before the opening bell.
Over the past three months, shares of U.S. Cellular returned 22.54% compared with the Zacks-categorized Wireless National industry’s gain of 7.98%.
Last quarter, the company posted a negative earnings surprise of 13.04%. However, the company’s earnings surpassed the Zacks Consensus Estimate in two of the previous four quarters, with an average beat of a stellar 28.51%.
Let’s see how things are shaping up for this announcement.
Factors at Play
U.S. Cellular continues to face numerous headwinds. It operates in a highly competitive wireless market and is significantly challenged by low-cost mobile service plans from others. Additionally, high costs associated with network integration and construction of cell sites, aggressive pricing by larger rivals and the ongoing consolidation in the wireless industry through mergers, acquisitions and joint ventures are near-term risks. The company’s last reported cash and liquidity scenario was also stressful. We hope the company recovers from it in the to-be reported quarter.
Nevertheless, U.S. Cellular’s top priority has always been subscriber additions and churn management. To this end, the company has taken up different calculative and judicious business moves such as the introduction of a new billing system, continuous rollout of 4G LTE, enhancement of LTE handsets, completion of various spectrum transactions and monetization of non-strategic assets. Moreover, the Shared Connect plans which offer more data, larger allotments and unlimited offerings also bode well. The company’s decision to increase the amount of data available in its existing prepaid plans should expand its subscriber base.
Meanwhile, U.S. Cellular is optimistic about its collaboration with Ericsson (ERIC - Free Report) . U.S. Cellular is also optimistic about the growing demand for smartphones, which enjoy significant market penetration, supporting growth in data revenues. The company is also focused on various cost cutting initiatives.
Earnings Whispers
Our proven model does not conclusively show that U.S. Cellular 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: U.S. Cellular has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 8 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: U.S.Cellular has a Zacks Rank #4 (Sell).
We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
United States Cellular Corporation Price and EPS Surprise
Here is a company in the Zacks categorized broader Computer and Technology sector that has the right combination of elements to post an earnings beat this quarter.
Benefitfocus, Inc. is expected to release fourth-quarter 2016 results on Feb 23, 2017. The company has an Earnings ESP of +3.45% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here. Benefitfocus’ earnings outshined the Zacks Consensus Estimate in each of the previous four quarters, with an average beat of 24.93%.
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 >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Will U.S. Cellular (USM) Disappoint this Earnings Season?
United States Cellular Corp. (USM - Free Report) , the wireless subsidiary of Telephone & Data Systems Inc. (TDS - Free Report) , is slated to report fourth-quarter 2016 results on Feb 24, before the opening bell.
Over the past three months, shares of U.S. Cellular returned 22.54% compared with the Zacks-categorized Wireless National industry’s gain of 7.98%.
Last quarter, the company posted a negative earnings surprise of 13.04%. However, the company’s earnings surpassed the Zacks Consensus Estimate in two of the previous four quarters, with an average beat of a stellar 28.51%.
Let’s see how things are shaping up for this announcement.
Factors at Play
U.S. Cellular continues to face numerous headwinds. It operates in a highly competitive wireless market and is significantly challenged by low-cost mobile service plans from others. Additionally, high costs associated with network integration and construction of cell sites, aggressive pricing by larger rivals and the ongoing consolidation in the wireless industry through mergers, acquisitions and joint ventures are near-term risks. The company’s last reported cash and liquidity scenario was also stressful. We hope the company recovers from it in the to-be reported quarter.
Nevertheless, U.S. Cellular’s top priority has always been subscriber additions and churn management. To this end, the company has taken up different calculative and judicious business moves such as the introduction of a new billing system, continuous rollout of 4G LTE, enhancement of LTE handsets, completion of various spectrum transactions and monetization of non-strategic assets. Moreover, the Shared Connect plans which offer more data, larger allotments and unlimited offerings also bode well. The company’s decision to increase the amount of data available in its existing prepaid plans should expand its subscriber base.
Meanwhile, U.S. Cellular is optimistic about its collaboration with Ericsson (ERIC - Free Report) . U.S. Cellular is also optimistic about the growing demand for smartphones, which enjoy significant market penetration, supporting growth in data revenues. The company is also focused on various cost cutting initiatives.
Earnings Whispers
Our proven model does not conclusively show that U.S. Cellular 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: U.S. Cellular has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 8 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: U.S.Cellular has a Zacks Rank #4 (Sell).
We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
United States Cellular Corporation Price and EPS Surprise
United States Cellular Corporation Price and EPS Surprise | United States Cellular Corporation Quote
Key Pick
Here is a company in the Zacks categorized broader Computer and Technology sector that has the right combination of elements to post an earnings beat this quarter.
Benefitfocus, Inc. is expected to release fourth-quarter 2016 results on Feb 23, 2017. The company has an Earnings ESP of +3.45% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here. Benefitfocus’ earnings outshined the Zacks Consensus Estimate in each of the previous four quarters, with an average beat of 24.93%.
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 >>