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Will Lower Business Revenues Dent Verizon (VZ) Q3 Earnings?
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Verizon Communications Inc. (VZ - Free Report) is scheduled to report third-quarter 2023 results before the opening bell on Oct 24. In the quarter, the Business segment is likely to have recorded year-over-year lower revenues owing to a challenging macroeconomic environment.
Factors at Play
The Business segment includes the wireless and wireline operations of Wholesale, Public Sector and Other, Small and Medium Business, and Global Enterprise.
During the third quarter, Verizon continued the deployment and management of private wireless technology across NFL stadiums. The Verizon’s Managed Private Wireless Solution, coach-to-coach communications, was officially live in all 30 NFL stadiums. It enabled private network connectivity at the field level of each stadium, leveraging antennas that allow for full coverage throughout the field.
In the quarter, Verizon unveiled a new vehicle that delivers a private network, private mobile edge compute, SD-Wan and satellite connectivity to customer locations. Dubbed Mobile Onsite Network-as-a-Service (NaaS), the solution supports both 4G and 5G standalone functionality. It provides scalable, reliable 5G and edge compute that can be managed locally by enterprise and public sector customers for enhanced operational flexibility without any costs entailed in a permanent installation. These are likely to be reflected in the upcoming quarterly results.
However, adverse foreign currency translations and high operating costs are likely to have led to soft margins in the second quarter. Challenging macroeconomic conditions and high inflationary pressures are expected to have affected the quarterly performance. In addition, the company’s wireline division is struggling with persistent losses in access lines owing to competitive pressure from the voice-over-Internet protocol (VoIP) service providers and aggressive triple-play (voice, data and video) offerings by cable companies.
Our estimate for revenues from the Business segment is pegged at $7,694 million, indicating a decline from $7,837 million reported in the year-ago quarter. Our estimate for operating income from the segment stands at $663.5 million, suggesting a fall from $698 million.
Overall Expectations
For the September quarter, the Zacks Consensus Estimate for revenues is pegged at $33,390 million. It reported revenues of $34,241 million in the year-ago quarter. The consensus estimate for adjusted earnings per share stands at $1.17, which suggests a decline from the year-ago tally of $1.32.
Earnings Whispers
Our proven model does not predict an earnings beat for Verizon for the third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.38%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Verizon Communications Inc. Price and EPS Surprise
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
The Earnings ESP for Silicon Motion Technology Corporation (SIMO - Free Report) is +3.00% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Nov 1.
The Earnings ESP for Meta Platforms, Inc. (META - Free Report) is +3.98% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Oct 25.
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Will Lower Business Revenues Dent Verizon (VZ) Q3 Earnings?
Verizon Communications Inc. (VZ - Free Report) is scheduled to report third-quarter 2023 results before the opening bell on Oct 24. In the quarter, the Business segment is likely to have recorded year-over-year lower revenues owing to a challenging macroeconomic environment.
Factors at Play
The Business segment includes the wireless and wireline operations of Wholesale, Public Sector and Other, Small and Medium Business, and Global Enterprise.
During the third quarter, Verizon continued the deployment and management of private wireless technology across NFL stadiums. The Verizon’s Managed Private Wireless Solution, coach-to-coach communications, was officially live in all 30 NFL stadiums. It enabled private network connectivity at the field level of each stadium, leveraging antennas that allow for full coverage throughout the field.
In the quarter, Verizon unveiled a new vehicle that delivers a private network, private mobile edge compute, SD-Wan and satellite connectivity to customer locations. Dubbed Mobile Onsite Network-as-a-Service (NaaS), the solution supports both 4G and 5G standalone functionality. It provides scalable, reliable 5G and edge compute that can be managed locally by enterprise and public sector customers for enhanced operational flexibility without any costs entailed in a permanent installation. These are likely to be reflected in the upcoming quarterly results.
However, adverse foreign currency translations and high operating costs are likely to have led to soft margins in the second quarter. Challenging macroeconomic conditions and high inflationary pressures are expected to have affected the quarterly performance. In addition, the company’s wireline division is struggling with persistent losses in access lines owing to competitive pressure from the voice-over-Internet protocol (VoIP) service providers and aggressive triple-play (voice, data and video) offerings by cable companies.
Our estimate for revenues from the Business segment is pegged at $7,694 million, indicating a decline from $7,837 million reported in the year-ago quarter. Our estimate for operating income from the segment stands at $663.5 million, suggesting a fall from $698 million.
Overall Expectations
For the September quarter, the Zacks Consensus Estimate for revenues is pegged at $33,390 million. It reported revenues of $34,241 million in the year-ago quarter. The consensus estimate for adjusted earnings per share stands at $1.17, which suggests a decline from the year-ago tally of $1.32.
Earnings Whispers
Our proven model does not predict an earnings beat for Verizon for the third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.38%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Verizon Communications Inc. Price and EPS Surprise
Verizon Communications Inc. price-eps-surprise | Verizon Communications Inc. Quote
Zacks Rank: Verizon has a Zacks Rank #4 (Sell).
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Intel Corporation (INTC - Free Report) is set to release quarterly numbers on Oct 26. It has an Earnings ESP of +12.98% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Silicon Motion Technology Corporation (SIMO - Free Report) is +3.00% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Nov 1.
The Earnings ESP for Meta Platforms, Inc. (META - Free Report) is +3.98% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Oct 25.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.