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Sprint (S) to Post Q4 Earnings: Is a Beat in the Cards?
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Sprint Corporation (S - Free Report) is scheduled to report fourth-quarter fiscal 2017 results after the closing bell on May 2. The company is diligently focusing on delivering 5G technology in major cities across the country to provide faster speed and superior service compared to the existing network facilities.
Whether this will lead to higher earnings in the quarter remains to be seen.
Focus on 5G Technology
Large carriers like Sprint are continuously focusing on building a fiber and wireless infrastructure in a bid to deliver mobile video efficiently. The company is mulling to roll out advanced network technology called Massive MIMO to introduce 5G capabilities in cities like Chicago, Dallas and Los Angeles while expanding in additional markets like Atlanta, Houston and Washington, DC later this year. Accumulation of dark fiber is expected to bolster cell network density, thereby improving mobile backhaul network. This, in turn, is likely to offer a competitive advantage to the company based on its technical superiority, quality of services and scalability.
Latency period of 5G data delivery will be in single milliseconds. Further, 5G technology is designed to be more power efficient than any other standard wireless network available in the market. Therefore, 5G-enabled mobile devices are likely to last a lot longer than their 3G or 4G counterparts. Additionally, superfast 5G mobile networks will be of utmost necessity in managing the exponential growth of Internet of Things.
Other Factors
Despite the positives, Sprint’s margins are likely to be affected by increased competition as the United States boasts a high rate (95%) of wireless penetration. Sprint has been continually making efforts to lure customers from rival carriers by offering attractive promotional plans and lucrative discounts. This has led to a high cash burn rate and heavy losses for the company.
In order to improve the sustainability of the companies, the industry is witnessing massive consolidation wave. Recently, T-Mobile US, Inc. inked a merger agreement with Sprint to reduce the number of players in the industry to three leading carriers. The deal is subject to mandatory closing conditions and regulatory approvals and is not likely to have any material impact on the impending quarterly results. (Read more: T-Mobile Acquires Sprint to Accelerate 5G Deployment)
The Zacks Consensus Estimate for fiscal fourth-quarter revenues for Sprint is currently pegged at $7,999 million compared with $8,539 million reported in the year-ago quarter.
However, our proven model conclusively shows that Sprint is likely to beat earnings this quarter as it possesses the key components. 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. This is perfectly the case here as you will see below:
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +13.98% as the former is pegged at a loss of 5 cents and the latter at a loss of 6 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Sprint has a Zacks Rank #3. This increases the predictive power of ESP and makes us reasonably confident of an earnings beat.
Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies 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:
EOG Resources, Inc. (EOG - Free Report) has an Earnings ESP of +3.33% and a Zacks Rank #3.
Instructure, Inc. has an Earnings ESP of +1.56% and a Zacks Rank #2.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Sprint (S) to Post Q4 Earnings: Is a Beat in the Cards?
Sprint Corporation (S - Free Report) is scheduled to report fourth-quarter fiscal 2017 results after the closing bell on May 2. The company is diligently focusing on delivering 5G technology in major cities across the country to provide faster speed and superior service compared to the existing network facilities.
Whether this will lead to higher earnings in the quarter remains to be seen.
Focus on 5G Technology
Large carriers like Sprint are continuously focusing on building a fiber and wireless infrastructure in a bid to deliver mobile video efficiently. The company is mulling to roll out advanced network technology called Massive MIMO to introduce 5G capabilities in cities like Chicago, Dallas and Los Angeles while expanding in additional markets like Atlanta, Houston and Washington, DC later this year. Accumulation of dark fiber is expected to bolster cell network density, thereby improving mobile backhaul network. This, in turn, is likely to offer a competitive advantage to the company based on its technical superiority, quality of services and scalability.
Latency period of 5G data delivery will be in single milliseconds. Further, 5G technology is designed to be more power efficient than any other standard wireless network available in the market. Therefore, 5G-enabled mobile devices are likely to last a lot longer than their 3G or 4G counterparts. Additionally, superfast 5G mobile networks will be of utmost necessity in managing the exponential growth of Internet of Things.
Other Factors
Despite the positives, Sprint’s margins are likely to be affected by increased competition as the United States boasts a high rate (95%) of wireless penetration. Sprint has been continually making efforts to lure customers from rival carriers by offering attractive promotional plans and lucrative discounts. This has led to a high cash burn rate and heavy losses for the company.
In order to improve the sustainability of the companies, the industry is witnessing massive consolidation wave. Recently, T-Mobile US, Inc. inked a merger agreement with Sprint to reduce the number of players in the industry to three leading carriers. The deal is subject to mandatory closing conditions and regulatory approvals and is not likely to have any material impact on the impending quarterly results. (Read more: T-Mobile Acquires Sprint to Accelerate 5G Deployment)
The Zacks Consensus Estimate for fiscal fourth-quarter revenues for Sprint is currently pegged at $7,999 million compared with $8,539 million reported in the year-ago quarter.
However, our proven model conclusively shows that Sprint is likely to beat earnings this quarter as it possesses the key components. 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. This is perfectly the case here as you will see below:
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +13.98% as the former is pegged at a loss of 5 cents and the latter at a loss of 6 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Sprint Corporation Price and EPS Surprise
Sprint Corporation Price and EPS Surprise | Sprint Corporation Quote
Zacks Rank: Sprint has a Zacks Rank #3. This increases the predictive power of ESP and makes us reasonably confident of an earnings beat.
Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies 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:
Casa Systems, Inc. has an Earnings ESP of +6.48% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
EOG Resources, Inc. (EOG - Free Report) has an Earnings ESP of +3.33% and a Zacks Rank #3.
Instructure, Inc. has an Earnings ESP of +1.56% and a Zacks Rank #2.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>