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Telecom Stock Earnings' Predictions for VZ, GLW and QRVO

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The Technology sector, of which Telecom is an essential part, is likely to be a drag on overall fourth-quarter earnings. The sector is expected to have taken a beating from the on-again-off-again trade war skirmishes that sent confusing signals to the market. Sector revenues, particularly within the chip industry, are expected to have declined significantly as the market bore the brunt of tariffs and counter tariffs, awaiting the trade deal.

Various trade restrictions on grounds of national security concerns hampered the supply chain mechanism of the companies and eroded sector margins. In addition, higher infrastructure investments are expected to have escalated operating costs as 5G deployments picked up pace across the United States.

Upfront investment in capital and wireless spectrum for 5G has proven to be substantially higher than prior generations of wireless deployments due to network density requirements, potentially hurting return of capital metrics. The potential for meaningful revenues to lag 5G buildouts poses significant credit risks for providers pursing aggressive deployments.

Technological advances have changed the way consumers communicate, resulting in higher data consumption and video streaming. But intense competition and commoditization of services have limited the chance to benefit from these trends.   

As we know, Technology and Finance are the two biggest earnings contributors to the S&P 500 and they are pulling the index’s growth picture in opposite directions in the December quarter. Per the latest Earnings Outlook, total earnings for the Technology sector for the quarter are expected to be down 4.2% on 3.9% higher revenues year over year. This compares with the prior-quarter decline of 7% on 2.4% revenue growth year over year.

Let’s take a look at three Telecom stocks that are slated to report results for the December quarter.

Verizon Communications Inc. (VZ - Free Report) is scheduled to release fourth-quarter 2019 results on Jan 30, before the opening bell. The Zacks Consensus Estimate for total revenues stands at $34,520 million. The consensus estimate for earnings is pegged at $1.15 per share, indicating a rise from $1.12 reported in the year-earlier quarter.

Our proven model predicts an earnings beat for Verizon this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Verizon has an Earnings ESP of +0.32% and a Zacks Rank #3.

Verizon Communications Inc. Price and EPS Surprise


You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

During the fourth quarter, Verizon collaborated with leading tech behemoths — Qualcomm Incorporated and Ericsson — to initiate a trial run for demonstrating the feasibility of next-gen networking technology Dynamic Spectrum Sharing (DSS). With DSS, Verizon will provide Ultra Wideband network services in areas that utilize 4G spectrum to drive 5G signal, enabling seamless interchange of networking infrastructure between 4G and 5G devices based on traffic demand to minimize spectrum waste. (Read more: Can Solid Wireless Business Aid Verizon's Q4 Earnings?)

Corning Incorporated (GLW - Free Report) is slated to report fourth-quarter 2019 results on Jan 29, before the opening bell. The Zacks Consensus Estimate for aggregate revenues stands at $2,680 million, suggesting a decline of 13% from the prior-year quarter’s recorded figure. The consensus mark for adjusted earnings per share is pegged at 44 cents, indicating a decline from earnings of 59 cents reported a year ago.  

Corning has an Earnings ESP of -0.38% and a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.

Corning Incorporated Price and EPS Surprise

On Sep 16, 2019, the specialty glass maker communicated its reduced expectations for two business segments, Optical Communications and Display Technologies, while maintaining guidance in its other three segments for the second half of 2019. (Read more: Will Lower Revenues Dampen Corning's Q4 Earnings?)

Qorvo, Inc. (QRVO - Free Report) is set to report third-quarter fiscal 2020 results on Jan 29, after the closing bell. The Zacks Consensus Estimate for earnings is pegged at $1.67 per share. The figure indicates a decline of 9.7% from the year-ago quarter’s reported figure. The consensus mark for revenues stands at $851 million, which implies growth of 2.3% from the prior-year quarter’s reported figure.

Qorvo has an Earnings ESP of 0.00% and a Zacks Rank #3.

Qorvo, Inc. Price and EPS Surprise

The company’s results are expected to have benefited from solid demand for performance-tier for RF Fusion-based solutions, antenna tuning, discrete components and Bulk Acoustic Wave based multiplexers. It anticipates Mobile Products division sales to increase sequentially and return to growth on a year-over-year basis, driven by higher 5G handset volumes. (Read more: Qorvo Set to Report Q3 Earnings: What’s in the Cards?)

Check back later for our full write-up on earnings releases of these stocks.

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Qorvo, Inc. (QRVO) - free report >>

Verizon Communications Inc. (VZ) - free report >>

Corning Incorporated (GLW) - free report >>