Back to top

Image: Bigstock

Lumen (LUMN) to Report Q1 Earnings: Here's What to Expect

Read MoreHide Full Article

Lumen Technologies, Inc (LUMN - Free Report) is scheduled to report first-quarter 2023 results on May 2, after the closing bell.

The Zacks Consensus Estimate for total revenues is pegged at $3.72 billion, suggesting a fall of 20.5% from the year-ago quarter’s reported figure. The consensus estimate for earnings is currently pegged at 12 cents per share, indicating a decline of 81% from the year-ago quarter’s levels. Our projection for the top and bottom lines is $3.652 billion and 13 cents per share, respectively.

The company missed the Zacks Consensus Estimate in two of the last four quarters and beat twice. It has a trailing four-quarter negative earnings surprise of 52.6%, on average.

In the last reported quarter, Lumen, an LA-based telecommunications company, reported adjusted earnings (excluding special items) of 43 cents per share compared with 51 cents in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by 12 cents.

Quarterly total revenues of $3,800 million fell short of the Zacks Consensus Estimate of $3,746 million and decreased 21.6% year over year on a reported basis. Also, the top line declined 6% on a modified basis.

In the past year, shares of the company have lost 77% compared with the sub-industry’s decline of 22.6%.

Zacks Investment Research
Image Source: Zacks Investment Research

Factors at Play

Supply-chain woes, uncertainty prevailing over global macroeconomic conditions, forex volatility and inflationary pressure are likely to have affected Lumen’s first-quarter revenues.

The company also has been undergoing a time-consuming digital transformation process. Weakness in Business, Enterprise Channels and Mass markets business segments, along with massive debt are other headwinds.

While selling of non-accretive businesses is likely to bode well in the long term it is expected to affect results in the near term. After the completion of the sale of its Latin America business in August 2022, the company completed the sale of its 20-state ILEC business to Apollo in October, 2022. LUMN also announced the sale of its Europe, Middle East and Asia business to Colt Technology Services for $1.8 billion in October 2022.

Lumen Technologies, Inc. Price and EPS Surprise

Lumen Technologies, Inc. Price and EPS Surprise

Lumen Technologies, Inc. price-eps-surprise | Lumen Technologies, Inc. Quote

However, momentum in security, cloud, unified communications and IT products is likely to have offered some cushioning to the top-line performance.

Continued investments in Quantum Fiber and enterprise business may have been positives. In the last reported quarter, Lumen added 19,000 Quantum fiber subscribers, taking the count to 832,000.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Lumen 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.

LUMN has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Marriott International (MAR - Free Report) has an Earnings ESP of +3.04% and currently flaunts a Zacks Rank of 1. MAR is set to announce quarterly figures on May 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for MAR’s to-be-reported quarter’s earnings and revenues is pegged at $1.85 per share and $5.28 billion, respectively. Shares of MAR are down 4.1% in the past year.

Colgate-Palmolive Company (CL - Free Report) has an Earnings ESP of +1.43% and presently carries a Zacks Rank #2. CL is slated to release quarterly numbers on Apr 28.

The Zacks Consensus Estimate for CL’s to-be-reported quarter’s earnings and revenues is pegged at 70 cents per share and $4.62 billion, respectively. Shares of CL are down 3.8% in the past year.

American Airlines Group (AAL - Free Report) has an Earnings ESP of +85.71% and currently has a Zacks Rank #2. AAL is scheduled to report quarterly earnings on Apr 27.

The Zacks Consensus Estimate for AAL’s to-be-reported quarter’s earnings and revenues is pegged at 3 cents per share and $12.25 billion, respectively. Shares of AAL are down 32.2% in the past year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Published in