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CenturyLink (CTL): Is a Beat in Store this Earnings Season?
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CenturyLink Inc. , a leading regional wireline service provider in the U.S., is scheduled to report fourth-quarter 2016 numbers on Feb 8, after the market closes.
Last quarter, the company posted a positive earnings surprise of 1.82%. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in all the previous four quarters, with an average beat of 9.02%.
However, shares of CenturyLink lagged the Zacks classified 'Wireless National’ industry’s gain over the past three months. The stock registered growth of 9.01%, but failed to beat the industry’s gain of 10.15% over the same time span.
Let’s see how things are shaping up for this announcement.
Why a Likely Positive Surprise?
Our proven model shows that CenturyLink is likely to beat estimates because it has the right combination of the two key elements.
Zacks ESP: CenturyLink has an Earnings ESP of +1.79%. This is because the Most Accurate estimate stands at 57 cents while the Zacks Consensus Estimate is pegged lower at 56 cents. This is a meaningful indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with ourEarnings ESP Filter.
Zacks Rank: CenturyLink has a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating estimates. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of CenturyLink’sZacks Rank #3 and +1.79% ESP makes us confident of an earnings beat.
What is Driving the Better-than-Expected Earnings?
CenturyLink is on track with its network simplification and rationalization efforts, which have helped it improve its end-to-end provisioning time and drive standardization. Moreover, the company's constant efforts to establish itself as a global leader in the cloud infrastructure and the hosted IT solutions arena for enterprise customers are encouraging. Growing momentum in CenturyLink’s Prism IPTV service has encouraged the company to launch the OTT offering. The company’s officials have stated that they don’t plan to discontinue the IPTV services. However, the company might decide to replace the IPTV line of services with OTT plans in the near future. By foraying into the OTT space, the company has joined the likes of DISH Network Corp.’s Sling TV and AT&T Inc.’s (T - Free Report) DirecTV Now.
We also appreciate CenturyLink’s efforts to reward its shareholders with a quarterly cash dividend of 54 cents per share. The cash dividend was paid on Dec 12, 2016, to shareholders of record on Nov 28, 2016.
The deal to purchase Level 3 Communications Inc. (LVLT) bodes well. The combined entity will be a formidable force in the fiber-based metro-Ethernet and Internet backbone market.
However, the company continues to face persistent losses in the company's access lines and legacy voice services, on an organic basis. Further, decline in subsidy payments by the Federal Universal Service Fund, tough competition, federal regulations, labor union issues and the need to upgrade technology remain potent headwinds.
Here is a company that has the right combination of elements to post an earnings beat this quarter.
Applied Optoelectronics, Inc. (AAOI - Free Report) is scheduled to release fourth-quarter 2016 financial results on Feb 23, 2017.Its earnings surpassed the Zacks Consensus Estimate in two of the previous four quarters, with an average beat of 106.74%. It currently has an Earnings ESP of +15.87% and a Zacks Rank #1.You can see the complete list of today’s Zacks #1 Rank stocks here.
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CenturyLink (CTL): Is a Beat in Store this Earnings Season?
CenturyLink Inc. , a leading regional wireline service provider in the U.S., is scheduled to report fourth-quarter 2016 numbers on Feb 8, after the market closes.
Last quarter, the company posted a positive earnings surprise of 1.82%. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in all the previous four quarters, with an average beat of 9.02%.
However, shares of CenturyLink lagged the Zacks classified 'Wireless National’ industry’s gain over the past three months. The stock registered growth of 9.01%, but failed to beat the industry’s gain of 10.15% over the same time span.
Let’s see how things are shaping up for this announcement.
Why a Likely Positive Surprise?
Our proven model shows that CenturyLink is likely to beat estimates because it has the right combination of the two key elements.
Zacks ESP: CenturyLink has an Earnings ESP of +1.79%. This is because the Most Accurate estimate stands at 57 cents while the Zacks Consensus Estimate is pegged lower at 56 cents. This is a meaningful indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with ourEarnings ESP Filter.
Zacks Rank: CenturyLink has a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating estimates. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of CenturyLink’sZacks Rank #3 and +1.79% ESP makes us confident of an earnings beat.
What is Driving the Better-than-Expected Earnings?
CenturyLink is on track with its network simplification and rationalization efforts, which have helped it improve its end-to-end provisioning time and drive standardization. Moreover, the company's constant efforts to establish itself as a global leader in the cloud infrastructure and the hosted IT solutions arena for enterprise customers are encouraging. Growing momentum in CenturyLink’s Prism IPTV service has encouraged the company to launch the OTT offering. The company’s officials have stated that they don’t plan to discontinue the IPTV services. However, the company might decide to replace the IPTV line of services with OTT plans in the near future. By foraying into the OTT space, the company has joined the likes of DISH Network Corp.’s Sling TV and AT&T Inc.’s (T - Free Report) DirecTV Now.
We also appreciate CenturyLink’s efforts to reward its shareholders with a quarterly cash dividend of 54 cents per share. The cash dividend was paid on Dec 12, 2016, to shareholders of record on Nov 28, 2016.
The deal to purchase Level 3 Communications Inc. (LVLT) bodes well. The combined entity will be a formidable force in the fiber-based metro-Ethernet and Internet backbone market.
However, the company continues to face persistent losses in the company's access lines and legacy voice services, on an organic basis. Further, decline in subsidy payments by the Federal Universal Service Fund, tough competition, federal regulations, labor union issues and the need to upgrade technology remain potent headwinds.
CenturyLink, Inc. Price and EPS Surprise
CenturyLink, Inc. Price and EPS Surprise | CenturyLink, Inc. Quote
A Key Pick
Here is a company that has the right combination of elements to post an earnings beat this quarter.
Applied Optoelectronics, Inc. (AAOI - Free Report) is scheduled to release fourth-quarter 2016 financial results on Feb 23, 2017.Its earnings surpassed the Zacks Consensus Estimate in two of the previous four quarters, with an average beat of 106.74%. It currently has an Earnings ESP of +15.87% and a Zacks Rank #1.You can see the complete list of today’s Zacks #1 Rank stocks here.
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 >>