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Telecom Stock Roundup: Disappointing Q4 for Cincinnati Bell, CenturyLink, Mixed Bag for DISH

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The telecom space was rife with earnings reports last week. DISH Network Corp. (DISH - Free Report) posted mixed financial results in the fourth quarter of 2017. However, Cincinnati Bell Inc. (CBB - Free Report) , CenturyLink Inc. (CTL - Free Report) , America Movil S.A.B. (AMX - Free Report) and Liberty Global Plc. (LBTYA - Free Report) , all reported disappointing results. Notably, all the above-mentioned companies’ top and bottom lines have missed the Zacks Consensus Estimate.

DISH Network’s bottom-line beat the Zacks Consensus Estimate, the top line lagged the same. At the end of 2017, DISH Network had 13.242 million pay-TV subscribers, down 3.1% year over year. DISH TV subscribers were 11.03 million, down 9.4% year over year. Sling TV subscribers were 2.212 million, up 47.4% year over year. During 2017, DISH Network lost 0.995 million DISH TV subscribers but gained 0.711 million Sling TV Customers.

As of Dec 31, 2017, total access lines of CenturyLink were 10.282 million, down 7.3% year over year. High-speed broadband customer count was 5.662 million, down 4.8% year over year. At the end of 2017, Cincinnati Bell had 0.1837 million residential voice lines, down 8.7% year over year and 0.3331 million business voice lines, up 3.3% year over year.

Long distance lines were 0.2936 million, down 7.5%. DSL Internet subscribers were 0.0821 million, down 22.3%. Fioptics Internet customers were 0.2266 million, up 14.7%. Fioptics video subscribers were 0.1465 million, up 6.5% year over year.

In the reported quarter, America Movil added a net 1,680,000 postpaid customers. The company gained 565,000 postpsid subscribers but lost 350,000 prepaid customers. It gained 321,000 broadband connections but lost 278,000 pay-TV ones.

In the reported quarter, Liberty Global added a total of 149,200 RGUs (revenue generating units), including net gains of 116,000 and 87,700 subscribers for broadband Internet and telephony services, respectively. However, the company lost 54,500 video customers. Liberty Global currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Apart from earnings news, Qualcomm Inc. (QCOM - Free Report) is mulling over to raise bid for NXP Semiconductors NV (NXPI - Free Report) ,  in order to garner support of 80% shareholders of the latter, per CNBC. Notably, on Oct 27, 2016, Qualcomm had entered into a definitive agreement with the Netherlands-based mobile chipset giant for the acquisition.

Read the last Telecom Stock Roundup for Feb 08, 2018.

Recap of the Week’s Most Important Stories  

1.    CenturyLink's net income in fourth-quarter 2017 was $1,117 million or $1.26 per share, compared with $42 million or 8 cents in the year-ago quarter. However, adjusted earnings per share of 18 cents lagged the Zacks Consensus Estimate of 22 cents. Total revenues in fourth-quarter 2017 were $5,323 million compared with $4,289 million in the prior-year quarter. Revenues also missed the Zacks Consensus Estimate of $5,687 million.  (Read more: CenturyLink Q4 Earnings and Revenues Miss Estimates)

2.    On a GAAP basis, quarterly net loss of Cincinnati Bell came in at $18.8 million or a loss of 45 cents per share, wider than the net loss of $3.9 million or a loss of 9 cents per share in the year-ago quarter. Further, quarterly adjusted (excluding special items) loss per share was 18 cents, in contrast to the Zacks Consensus Estimate of earnings of 6 cents. Quarterly total revenues of $427.1 million were up a whopping 50% year over year. However, the figure lagged the Zacks Consensus Estimate of $466.5 million.  (Read more: Cincinnati Bell Incurs Loss in Q4, Revenues Miss)

3.    Quarterly net income of DISH Network came in at $1,385.5 million or $2.64 per share compared with $355.5 million or 73 cents in the year-ago quarter. Fourth quarter adjusted earnings per share of 57 cents were a penny higher than the Zacks Consensus Estimate Total revenues in the reported quarter were approximately $3,483.9 million, down 7.2% year over year lagging the Zacks Consensus Estimate of $3,546 million.  (Read more: DISH Network Q4 Earnings Top, Revenues Miss Estimates)

4.    America Movil’s net loss was $596 million, up a whopping 98% year over year. Quarterly loss per ADR (American Depository Receipt) of 16 cents was in contrast with the Zacks Consensus Estimate of earnings of 14 cents. Total revenues of approximately $13,917 million highlighted a decrease of 2% on a year-over-year basis missing the Zacks Consensus Estimate of $14,275 million.  (Read more: America Movil Posts Q4 Loss, Revenues Miss Estimates)
5.    GAAP net loss of Liberty Global in the fourth quarter was $0.992 billion against net income of $2.2 billion in the prior-year quarter. Quarterly net loss per share was 68 cents against earnings of $2.45 reported in the year-ago quarter. Quarterly total revenues of $3,987.7 million were down 5.4% year over year.  (Read More: Liberty Global Incurs Loss in Q4, Issues '18 View)

Price Performance

The following table shows the price movement of the major telecom stocks both in the last week and last six months.

CompanyLast WeekLast 6 Months

In the last five trading sessions, share price movement of all major telecom stocks was positive. America Movil and Charter Communications gained significantly in the same time frame while Verizon lost substantially. Meanwhile, price performances of most of the major telecom stocks were negative in the last six months. Sprint, DISH Network and Telefonica suffered major reverses in the stock price.

What’s Next in the Telecom Space?

We expect heightened activities in the telecom industry over the next week as big names like Altice USA, American Tower, SBA Communications, Cable ONE and Windstream scheduled to release fourth-quarter 2017 financial results. The market will closely evaluate these quarterly results in a bid to assess industry dynamics and growth prospects.

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