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TELUS (TU) to Report Q2 Earnings: Is A Beat in the Cards?

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Leading Canadian telecom operator, TELUS Corp. (TU - Free Report) , is expected to report its second-quarter financial numbers on Aug 11, 2017 before the market opens.

Last quarter, the company delivered a positive earnings surprise of 7.69%.  Moreover, TELUS has outpaced estimates in two of the past four quarters, with an average negative surprise of 0.87%.

Let’s see how things are shaping up for this announcement.

Why a Likely Positive Surprise?

Our proven model shows that TELUS is likely to beat earnings. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen.

Zacks ESP: TELUS has an Earnings ESP of +5.36%. This is because the Most Accurate estimate stands at 59 cents while the Zacks Consensus Estimate is pegged lower at 56 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: TELUS currently holds a Zacks Rank #2.

The combination of TELUS’ Zacks Rank #2 and positive ESP of 5.36% makes us reasonably confident of a positive earnings beat on Aug 11.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

 

TELUS Corporation Price and EPS Surprise

 

TELUS Corporation Price and EPS Surprise | TELUS Corporation Quote

What is Driving the Better-than-Expected Earnings?

TELUS has outperformed the industry’s growth in the past three months. The stock has grown 8.7%, outshining the industry’s gain of 3.6%.

The company has introduced the TELUS Global Internet of things (IoT) Connectivity platform to deliver seamless connectivity and simplified billing across 200 networks globally, to support the expansion of Canadian business enterprises.

Recently, TELUS and Huawei, one of the world's largest information and communications technology companies, successfully completed trials of 5G wireless technology, using the global 3GPP standards platform. This achievement is an important step toward building and deploying 3GPP-unified 5G networks around the world.

However, The Canadian telecom market has become intensely competitive, with rival companies offering newer quad-play bundled services. These comprise wireless, wireline, high-speed broadband and voice products. TELUS competes with the likes of Rogers Communications Inc. (RCI - Free Report) , Shaw Communications Inc. and BCE Inc. (BCE) in the Canadian telecom market.

A Key Pick

The AES Corporation (AES - Free Report) from the Zacks categorized broader Utilities sector has the right combination of elements to post an earnings beat when it expectedly reports its second-quarter 2017 results on Aug 8. AES Corporation has a positive Earnings ESP of 4.76% and a Zacks Rank #2.

You can see the complete list of today’s Zacks #1 Rank stocks here.

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